Key Takeaways

• Spot gold recovers modestly: Rose 0.3% to $4,269.42 per ounce after Wednesday’s 1.7% decline.
• Gold futures slip: U.S. gold futures fell 2.1% to $4,288.72 — reflecting persistent rate hike concerns in the futures market.
• Iran MOU the support: The 14-point memorandum begins a 60-day negotiation period with toll-free Hormuz passage and full capacity restoration within 30 days.
• Energy shock fears ease: The deal helps temper concerns about a prolonged oil supply disruption and energy-driven inflation — reducing a key headwind for gold.
• Portfolio hedge demand returns: With geopolitical risks easing, some investors are returning to gold as a diversifier.
• Fed held at 3.50%-3.75%: As expected, but the hawkish projections caught markets off guard.
• Nine of 19 officials see 2026 hike: A marked shift from expectations at the start of the year.
• Warsh’s inflation resolve: The new Fed chair emphasized the central bank’s commitment to restoring price stability in his first meeting.
• Fed raises inflation forecasts: The upward revisions prompted investors to scale back rate cut expectations.
• Dollar strength caps gold: A firmer greenback makes dollar-denominated bullion more expensive for overseas buyers.
• Opportunity cost remains elevated: Higher-for-longer rates continue to reduce the appeal of non-yielding gold.

Gold prices rose on Thursday, recovering from the previous session’s losses as investors weighed the signing of a U.S.-Iran interim peace agreement against the Federal Reserve’s signal for an interest rate hike later this year.

Spot gold rose 0.3% to $4,269.42 an ounce by 05:46 ET (09:46 GMT). However, gold futures slipped 2.1% to $4,288.72 per ounce.

The yellow metal fell 1.7% in the previous session due to a stronger U.S. dollar and rising Treasury yields following the Fed’s latest policy decision.

Iran MOU Provides Support

Bullion found support from optimism surrounding the U.S.-Iran accord, which is expected to ease tensions in the Middle East and pave the way for the reopening of key energy export routes.

The 14-point memorandum begins a 60-day negotiation period during which Iran will allow toll-free passage through the Strait of Hormuz. The deal calls for traffic through the strait to be restored to its full capacity within 30 days.

The agreement has helped temper fears of a prolonged oil supply shock, reducing concerns about energy-driven inflation and supporting demand for bullion as a portfolio hedge.

Fed’s Hawkish Signals Cap the Rally

However, gains were capped after the Federal Reserve held interest rates steady at 3.50%-3.75% on Wednesday and signaled that policymakers still see scope for tighter monetary policy later this year.

Updated projections showed that nine of 19 Fed officials expect at least one rate increase in 2026 — a marked shift from expectations at the beginning of the year.

In his first meeting as Fed chair, Kevin Warsh maintained a firm stance on inflation, emphasizing the central bank’s commitment to restoring price stability.

The Fed also raised its inflation forecasts, prompting investors to scale back expectations for rate cuts and boosting the dollar. A stronger greenback typically makes dollar-denominated gold more expensive for overseas buyers, while higher interest rates increase the opportunity cost of holding non-yielding bullion.