Gold holds steady as inflation data looms and Middle East tensions cloud rate outlook

Gold prices stabilized near $4,721.51 per ounce on Thursday as investors weighed conflicting signals from inflation expectations and geopolitical risk, with a key U.S. inflation report looming. The fragile U.S.-Iran ceasefire and Israel’s heavy strikes on Lebanon — which killed hundreds and triggered retaliation threats — have kept safe-haven demand in play, but rising energy prices are feeding inflation fears that undercut gold’s appeal. Since the conflict began on February 28, spot gold has fallen more than 10%, pressured by a re-pricing of interest rate expectations. The Federal Reserve’s March meeting minutes revealed that more policymakers saw potential need for rate hikes as inflation continues to run above the 2% target. With U.S. Personal Consumption Expenditures data due at 1230 GMT, markets are poised for clues on whether the Fed will maintain restrictive policy or pivot toward cuts. Higher rates typically hurt non-yielding assets like gold, even as Middle East supply disruptions lift oil prices and inflation. While GoldSilver Central’s Brian Lan expects gold to consolidate between $4,607 and $4,860, Standard Chartered forecasts a recovery in coming months as geopolitical risk remains elevated.