Gold Hovers Near Two-Week High

Gold traded around $4,130 per ounce on Thursday, holding near a two-week high as dip-buying and safe-haven demand offset concerns that higher oil prices could keep US interest rates elevated. Geopolitical tensions remained in focus after Iran-backed Houthi militants claimed attacks on two Saudi oil tankers in the Red Sea, a vital shipping route for Saudi crude exports, raising risks of broader energy supply disruptions. Meanwhile, President Donald Trump warned of strikes on Iranian infrastructure if shipping through the Strait of Hormuz is targeted, fueling fears of further military escalation. Despite recent gains, gold remained well below its January record high, as rising oil prices reinforced expectations that inflation could keep US interest rates higher for longer. Markets continue to price in two 25 bps rate hikes by March 2027, with a 70% chance of the first increase as early as September.

Gold climbed to $4,150 an ounce on Wednesday, touching its highest level since July 7, supported by safe-haven demand and technical buying as investors monitored escalating Middle East tensions and awaited next week's Federal Reserve meeting for clues on the US interest rate outlook. Geopolitical risks intensified after President Donald Trump warned of further strikes on Iran and pledged retaliation if Iran-backed Houthi rebels disrupt shipping through the Red Sea. Meanwhile, Secretary of State Marco Rubio said the US remains open to a deal with Iran but questioned whether Tehran is willing to reach acceptable terms. Still, gold remained below the record highs reached in January, as elevated oil prices have fueled inflation concerns and strengthened expectations that interest rates will stay higher for longer. Markets continue to price in two 25-basis-point rate hikes by March 2027, with a 70% chance of the first increase coming as early as September.

Gold climbed above $4,100 an ounce on Wednesday, extending gains from the previous session as investors continued to monitor Middle East uncertainties and rising oil prices and their impact on inflation and interest rates. President Donald Trump downplayed the chances of near-term talks with Iran and warned of additional strikes, lifting oil prices. Iran-backed Houthi rebels in Yemen also disrupted shipping through the Red Sea, while a series of attacks on the Caspian Pipeline Consortium terminal along Russia’s Black Sea coast added to supply concerns. Meanwhile, ADP data showed US private employers added an average of 16,500 jobs per week over the four weeks ending July 4, down from an average weekly gain of 19,250 in the prior four-week period, marking a fourth straight slowdown in hiring. Markets widely expect the Federal Reserve to leave interest rates unchanged at next week’s meeting, while pricing in more than a 55% chance of a rate hike in September.