Gold held a modest gain, after the US Federal Reserve kept interest rates unchanged despite rising inflationary risks from the escalating war in the Middle East.
Bullion was near $4,060 an ounce in choppy trading, having advanced nearly 1% on Wednesday. The Fed voted 9-3 in favor of holding rates, although the split verdict signaled growing conviction among some policymakers that higher borrowing costs – typically a headwind for non-yielding gold – may still be needed to curb resurgent price pressures.
Fed Chairman Kevin Warsh insisted the latest decision wasn’t a sign of inertia at the US central bank. “If inflation continues to be elevated through the forecast period, interest rates could well be part of that solution, but I wouldn’t say it’s in isolation,” he said.
Traders pushed down yields on the most short-term Treasuries, a reflection of how they rapidly scaled back bets on immediate rate hikes, and pushed out their forecasts for an increase to later in the year. That reduced the opportunity cost of holding bullion.
Gold is down by nearly a quarter since the US-Iran war began more than five months ago, with high energy prices stoking inflationary pressures and raising the likelihood that rates will stay higher for longer. However, a wave of dip-buying has supported bullion at the key level of $4,000 an ounce in recent weeks and the metal is on track for its monthly gain since February.
“Overly shorted or disliked asset classes like precious metals and bonds” can expect relief rallies following the Fed’s decision, said Nicky Shiels, head of research and metals strategy at MKS PAMP SA. “Conviction is cautiously growing that this is a green light for larger re-engagement to pile into gold,” she wrote in a note, adding that $4,200 is a “key inflection point.”
In the Middle East, tensions escalated as the US launched a new wave of strikes against Iran in response to attacks on military bases in the region. The two sides had paused an exchange of strikes at the end of last week in a short-lived effort to pursue diplomacy. Oil edged lower on Thursday after its biggest daily jump in more than two weeks.
Spot gold edged down 0.3% to $4,056.50 an ounce at 11:25 a.m. in Singapore. Silver slipped 0.4% to $57.48 an ounce. Platinum and palladium also fell. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after dropping 0.3% in the previous session.
Published on July 30, 2026
