During Asian trading on Thursday, spot gold prices continued to recover. After falling for three consecutive sessions, gold prices moved higher as some bargain hunting helped the metal recoup a portion of its recent losses.
At one point, gold rose 0.7%, surpassing $4,580 per ounce, following a 3.4% decline over the prior three trading days. Although the U.S. Federal Reserve’s decision on Wednesday to keep interest rates unchanged was in line with market expectations, some hawkish policymakers voiced dissent, objecting to language in the post-meeting statement that suggested the central bank might eventually resume interest rate cuts.
Spot gold reached a session high of $4,582.56 per ounce, climbing nearly $40 during the day. On Wednesday, gold closed down $53.44, or 1.2%, at $4,543.39 per ounce.
U.S. Treasury yields fell sharply on Wednesday as traders increased bets that the Federal Reserve may need to raise borrowing costs due to persistent inflationary pressures. The two-year Treasury yield recorded its largest single-day gain since 2022 on the day of the Fed’s policy decision, putting pressure on non-yielding gold.
The Fed held interest rates steady, but the vote revealed the most divided policy decision since 1992. The policy statement expressed concerns about rising inflation, and four dissenting votes were cast. Aside from Fed Governor Milan, who again advocated for a rate cut, three other officials objected, arguing that the central bank should no longer signal a bias toward easing.
The 8–4 vote marked the first time since 1992 that four officials dissented from a Federal Open Market Committee (FOMC) decision, highlighting deepening divisions over the policy outlook amid heightened uncertainty as the war entered its ninth week.
Nicky Shiels, Head of Research and Precious Metals Strategy at MKS PAMP, stated, "The narrative of stagflation and high interest rates has returned to the forefront," a trend accelerated by the Fed’s hawkish tilt. She added, "The possibility of Fed rate hikes is a new and underestimated factor for gold."
Gold is on track for a second consecutive monthly decline in April, driven by soaring energy prices resulting from Middle East conflicts. Recent selling pressure intensified as peace talks between the U.S. and Iran stalled, and energy shipments through the Strait of Hormuz nearly halted.
Since the outbreak of the Iran war in late February, gold prices have fallen approximately 14%.
On Wednesday, U.S. President Donald Trump stated that the United States would continue its maritime blockade of Iranian ports to curb Tehran’s oil exports and pressure the country to return to negotiations. Brent crude oil settled above $118 per barrel, its highest level since June 2022.
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