Investing.com — Gold prices rose on Wednesday, rebounding above $4,400 an ounce after a three-session decline, as a weaker dollar offered fresh support while investors continued to weigh Middle East tensions and the outlook for Federal Reserve policy.
At 22:04 ET (06:04 GMT), rose 1.1% to $4,402.41 an ounce, while gained 0.2% to $4,445.85. climbed 1.5% to $66.76 an ounce, while rose 1.6% to $1,848.23. The fell 0.2% to 98.70.
Dollar weakness offers some relief after three-session slide
Gold has rebounded sharply after falling 2.6% over the previous three sessions, with spot bullion now back above $4,400. The move has been supported by a softer dollar, while investors continue to assess whether the latest Middle East tensions will keep inflation pressures elevated.
The metal remains well below last week’s levels, however, after stronger U.S. payrolls data revived expectations that the Federal Reserve could raise interest rates at its Sept. 14 to 15 meeting.
Markets are still pricing roughly a 60% chance of a Fed rate increase this month. Higher rates generally weigh on gold because bullion pays no interest. When bond yields rise, investors have more incentive to hold income generating assets instead.
The immediate focus remains on U.S. inflation data due later this week. A hotter reading could reinforce the case for a Fed hike and put renewed pressure on bullion, while softer inflation would give policymakers more room to keep rates unchanged.
Middle East tensions keep inflation risks alive
U.S. forces recently destroyed five Iranian oil tankers carrying crude near Kharg Island, Iran’s main oil export hub, after an attempted missile attack on an American warship. The incident raised fears that the months long conflict could escalate further and disrupt regional energy flows.
has remained close to $100 a barrel, keeping inflation risks elevated ahead of the Fed meeting. Higher energy costs can feed into consumer prices and make policymakers more reluctant to ease financial conditions.
ANZ analysts said investors appear to be stepping back from the gold market ahead of the FOMC meeting, with rising energy costs feeding into higher bond yields and creating a headwind for bullion. They also noted that the pressure has not stopped central-bank buying.
China’s central bank bought about 650,000 ounces of gold in August, its largest monthly addition since 2023, providing an important source of underlying demand even as prices have come under pressure.
Gold has remained in a relatively narrow range around $4,400 since rebounding from the $4,000 area in July. The recent decline has taken it below the 200-day moving average, but longer term demand from central banks and investors continues to provide a counterweight to the near term pressure from yields, oil and Fed policy.