Oil, dollar and Fed in focus
Gold has also found support from a softer US dollar, which Tran said weakened slightly to around 99.3. A weaker dollar usually helps gold because it makes the metal cheaper for buyers using other currencies.
“After being supported by relatively resilient U.S. economic data and expectations that the Fed would keep rates elevated, the dollar is now showing signs of losing momentum,” Tran said.
Global bullion prices were near $4,315 an ounce after climbing in the previous session. Gold held gains after US President Donald Trump said the Strait of Hormuz could reopen on Friday, a development that could ease the energy and inflation shock that has unsettled global markets.
Oil prices also remained under pressure, with West Texas Intermediate trading near $81 a barrel after falling almost 5% on Monday, while Brent ended near $83.
During the recent conflict, gold moved largely in the opposite direction to crude. Higher energy prices fed inflation concerns and strengthened expectations that central banks would keep rates higher for longer, reducing the appeal of gold.
What buyers should watch next
Tran said gold’s broader support remains intact, helped by central bank demand, investor hedging against inflation and policy uncertainty, and signs of improvement in gold exchange-traded fund flows.
She said ETF flows are important because they often reflect medium-term expectations for gold, instead of short-term reactions to geopolitical events.
The next key trigger will be the Federal Reserve meeting, with investors watching whether policymakers signal a softer stance on rates or maintain a more cautious tone.
“If the Fed delivers a more dovish message, Treasury yields cool, and the dollar continues to weaken, gold could extend its recovery toward 4,500 USD/oz in the short term,” Tran said.
She added that the recovery could lose momentum if the Fed maintains a hawkish stance or if the dollar rebounds.
– With inputs from Bloomberg.
Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation, and the big shifts shaping life in the Gulf. Before returning to Gulf News, she launched Finance Middle East, complete with a podcast and video series.
Her reporting has taken her from breaking spot news to long-form features and high-profile interviews. Nivetha has interviewed Prince Khaled bin Alwaleed Al Saud, Indian ministers Hardeep Singh Puri and N. Chandrababu Naidu, IMF’s Jihad Azour, and a long list of CEOs, regulators, and founders who are reshaping the region’s economy.
An Erasmus Mundus journalism alum, Nivetha has shared classrooms and newsrooms with journalists from more than 40 countries, which probably explains her weakness for data, context, and a good follow-up question.
When she is away from her keyboard (AFK), you are most likely to find her at the gym with an Eminem playlist, bingeing One Piece, or exploring games on her PS5.