Spot gold prices held firm at $4,133.82 an ounce in early Asian trading, supported by persistent dip-buying that countered headwinds from surging energy costs.
The precious metal’s resilience came even as hostilities in the Middle East pushed oil prices to multiweek highs, rekindling concerns that elevated inflationary pressure could force the Federal Reserve to maintain higher interest rates for longer.
The market dynamic reflects a tug-of-war between traditional safe-haven demand and the macroeconomic implications of rising energy prices.
While geopolitical tensions typically bolster gold, the associated spike in crude costs introduces inflation risks that can strengthen the dollar and weigh on non-yielding assets.
Recent US data had suggested easing inflationary pressures, which previously weakened the case for holding gold, but the renewed energy shock has complicated that narrative.
Traders are closely monitoring how the Federal Reserve will interpret the latest inflation signals.