Gold rose on Thursday as traders moved back into bullion after a sharp sell-off, helped by weaker oil prices and a calmer inflation backdrop following the release of a US-Iran interim agreement.
Spot prices climbed more than 1%, reversing part of Wednesday’s decline, as crude fell on hopes that energy flows through the Strait of Hormuz would normalise.
The rebound came with an important caveat.
The Federal Reserve’s latest projections have revived the risk of higher US interest rates later this year, limiting enthusiasm for a metal that offers no yield when cash returns are rising.
Oil’s retreat gives gold room to recover
The day’s move was driven less by fresh haven demand and more by positioning.
Spot gold rose 1.4% to $4,316.42 an ounce by 0242 GMT, after falling 1.7% in the previous session. August futures slipped 1% to $4,336.70, underlining the uneven tone in the market.
“It’s a bit of short position unwinding given yesterday’s steep fall,” Kelvin Wong, senior market analyst at OANDA, told Reuters.
He said positive news from the Middle East had also contributed by pushing oil prices lower.
Lower crude matters for bullion because energy shocks can feed inflation and raise the chance of tighter monetary policy.
With oil retreating after the publication of the interim agreement, traders found a reason to cover bearish bets.
Technical picture shows cautious rebound
Gold’s recovery has improved the short-term tone, but the move still looks more like a corrective bounce than a clean breakout.
Spot prices have moved back above the $4,300 level, a psychological marker that traders are likely to treat as an early test of whether buyers can rebuild momentum after Wednesday’s sharp fall.
As per analysts, the next area to watch is around $4,335-$4,360, where futures were trading and where sellers may look to defend the rebound.
A sustained move above that zone would suggest that short-covering is turning into fresh demand.
Failure to hold above $4,300 could bring the market back towards the lower end of this week’s range.
Other precious metals join the rebound
The wider precious-metals complex also traded higher, suggesting that Thursday’s move was not limited to gold.
Spot silver rose 1.8% to $69.18 an ounce, extending its recent strength as investors continued to balance its monetary appeal with its industrial demand profile.
Platinum gained 1.2% to $1,757.53, while palladium rose 1.3% to $1,329.99.
Both metals are more closely tied to industrial and automotive demand than gold, but they benefited from the broader improvement in sentiment across metals.
The recovery across silver, platinum and palladium points to renewed risk appetite after Wednesday’s pressure.
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