Gold Struggles Below $5,000 as Fed Signals and Inflation Fears Weigh

Gold prices edged slightly higher in Asian trading on Thursday but remained under pressure below key levels, as rising inflation concerns and uncertainty over interest rates continued to weigh on the metal.

By 01:47 ET (05:47 GMT), spot gold rose 0.2% to $4,833.60 per ounce, while gold futures fell 1.3% to $4,834.04 per ounce, hovering near their lowest levels in over a month.

Strong inflation data pressures gold

Gold came under significant pressure after stronger-than-expected U.S. producer price index (PPI) data and cautious signals from the Federal Reserve.

The central bank left interest rates unchanged but highlighted uncertainty around the inflation outlook, particularly as rising energy prices threaten to push inflation higher.

These developments pushed gold below its recent $5,000–$5,200 trading range, signaling a loss of upward momentum.

Markets are now pricing in no near-term rate cuts, with expectations shifting toward at least September for any potential easing.

Higher rates reduce gold’s appeal

The prospect of higher-for-longer interest rates has weighed heavily on gold, as rising yields increase the opportunity cost of holding non-yielding assets.

This dynamic has largely offset any safe-haven demand generated by ongoing geopolitical tensions.

Oil surge adds to inflation concerns

The continued rise in oil prices—driven by the U.S.-Israel conflict with Iran—has intensified fears of an energy-driven inflation shock.

Crude prices have surged as supply disruptions persist, particularly with the Strait of Hormuz remaining effectively closed and energy infrastructure across the Middle East under threat.

The conflict escalated further after strikes on the South Pars gas field, the world’s largest gas field, triggering retaliatory attacks by Iran on regional energy facilities.

These developments have fueled expectations that global central banks may adopt a more hawkish stance, further pressuring gold.

Broader metals also decline

Other precious metals extended losses:

• Silver fell 0.7% to $74.8325 per ounce
• Platinum dropped 0.6% to $2,012.68 per ounce

Like gold, both metals have struggled since late February amid rising inflation concerns and shifting monetary policy expectations.

Central banks in focus

Beyond the Federal Reserve, several major central banks are also in focus. The Bank of Japan has already kept rates unchanged, while decisions from the European Central Bank, Bank of England, and Swiss National Bank are due later in the day.

Outlook

Gold remains under pressure as markets prioritize inflation risks and interest rate expectations over geopolitical uncertainty.

Unless inflation shows signs of easing or central banks signal a shift toward policy easing, gold may continue to struggle to regain key levels in the near term.