Gold prices edged higher in Asian trading on Thursday, recovering from a one-month low, although gains remained limited as markets grappled with escalating tensions between the U.S. and Iran and a more hawkish outlook for the Federal Reserve.
Despite the uptick, bullion has been under pressure throughout April, as demand for safe-haven assets was largely offset by a stronger U.S. dollar and rising concerns that the Iran conflict could fuel inflation.
Spot gold climbed 0.5% to $4,564.12 per ounce, while gold futures gained 0.3% to $4,575.66/oz as of 02:12 ET (06:12 GMT).
Other precious metals also bounced back from recent declines. Spot silver rose 1.2% to $72.2485/oz, and spot platinum advanced 2% to $1,918/oz.
Gold pressured after Fed signals less dovish stance
Gold had fallen sharply overnight following the Federal Reserve’s decision to keep interest rates unchanged on Wednesday. However, the meeting highlighted growing disagreement among policymakers regarding the central bank’s easing stance.
Three members of the Fed’s 12-person rate-setting committee opposed the easing bias, citing heightened inflation risks and uncertainty tied to the Iran conflict.
This shift led traders to further dial back expectations for rate cuts in 2026. The U.S. dollar strengthened on Thursday, building on gains seen earlier in the week.
Wednesday’s meeting also marked the final one under Fed Chair Jerome Powell, who announced he will step down from the role but remain on the board as a governor.
Kevin Warsh, widely expected to succeed Powell, is likely to be confirmed in the coming weeks. Warsh previously told Congress he had made no commitments to lower interest rates.
Higher-for-longer rates tend to weigh on non-yielding assets such as gold, as they increase the opportunity cost of holding bullion compared to interest-bearing investments.
Beyond the Fed, both the Bank of England and the European Central Bank are scheduled to announce policy decisions later on Thursday.
Oil rally adds to inflation concerns
Precious metals markets continued to face headwinds from rising oil prices, with Brent crude climbing to a four-year high on Thursday.
The move followed reports that Donald Trump is set to receive a briefing on additional military options against Iran, including potential direct strikes, a forced partial reopening of the Strait of Hormuz, and even a special forces mission targeting Iran’s uranium reserves.
The spike in oil prices has intensified concerns that energy-driven inflation could prompt central banks to adopt a more hawkish stance. This dynamic has weighed heavily on gold since the Iran conflict escalated in late February.