Gold rises on Middle East tensions and dollar weakness, but $5,000 an ounce remains out of reach

Spot gold rose 0.3% to $4,728.18 per ounce on Thursday as a weaker dollar and persistent Middle East tensions drove investors toward alternative stores of value, even as the path to $5,000 an ounce remains clouded by inflation and monetary policy uncertainty. U.S. gold futures for June delivery slipped 0.5% to $4,754.30, underscoring divergence between spot and futures sentiment. The dollar held steady after steep losses in the prior session, providing temporary support to dollar-denominated commodities like gold. Yet broader gains were limited by ongoing volatility linked to a fragile U.S.-Iran ceasefire, with fighting still flaring in Lebanon, where over 250 people were killed in Israel’s largest single attack of the five-week war. Oil prices rebounded on renewed concerns that energy flows through the Strait of Hormuz could remain restricted, reinforcing inflationary pressure. Since the war began on February 28, bullion has lost more than 11%, as rising oil prices have eroded expectations of near-term U.S. interest rate cuts. The Federal Reserve’s March meeting minutes revealed that more policymakers now believe additional rate hikes may be necessary to tame inflation that continues to run above target. With monetary policy pivoting on inflation data, investors are awaiting the release of February’s Personal Consumption Expenditures (PCE) report at 1230 GMT for clearer direction. While some analysts see gold eyeing $5,000 per ounce, that level remains out of reach without a durable resolution to supply risks in the Strait of Hormuz and a shift toward looser monetary policy.