Gold advanced toward $4,100 an ounce on Thursday, extending the previous session’s gains after the Federal Reserve left interest rates unchanged despite growing inflationary pressures linked to renewed conflict in the Middle East. The decision lent support to bullion, as higher rates typically dampen demand for non-yielding assets.
However, three FOMC members dissented in favor of an immediate rate increase, and Chairman Kevin Warsh cautioned that if inflation remains elevated over the forecast horizon, higher interest rates could become an appropriate policy response.
Elsewhere, both the Bank of England and the Bank of Japan are widely expected to hold rates steady this week while maintaining a cautious stance on inflation. In the Middle East, President Donald Trump vowed a strong response following an attack on US forces in Jordan. At the same time, negotiations remained strained, with Tehran insisting on retaining control over the Strait of Hormuz, complicating efforts to reach a potential agreement.