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Gold Rebounds From Six-Month Low as Uncertainty Persists

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Gold Rebounds From Six-Month Low as Uncertainty Persists

Gold rebounded from a six-month low on Thursday as markets tracked interest rate expectations and geopolitical headlines.

Gold futures rose 0.9% to $4,172.3 per troy ounce, having declined to $4,046.20 earlier in the day. CNBC said that was the lowest level since November.

Spot gold gained 1.9% to $4,148.75, also off the session low of $4,024.01.

US annual inflation jumped to the highest level in about three years, official data showed Wednesday, fueling expectations that the Federal Reserve will maintain interest rates at current levels for a while.

Gold prices generally have an inverse relationship with interest rates. A strong labor market and rising prices have weakened the case for near-term monetary policy easing.

Last week, Cleveland Fed President Beth Hammack said the US central bank may need to raise interest rates should inflationary pressures persist. Hammack was one of the three Federal Open Market Committee voters that supported its April policy decision, but opposed including an easing bias in the statement.

President Donald Trump canceled scheduled strikes against Iran Thursday following increased hostilities, including US strikes in response to Tehran shooting down an American Apache helicopter.

Iran launched its own retaliatory attacks in recent days.

Bullion has now lost $1,570 in value from its January peak, Saxo Bank said in a report on Thursday.

The yellow metal has corrected 38% of its 2022 to 2026 rally, according to the report.

"While the longer-term supportive themes are likely to reassert themselves once the inflation outlook stabilizes, the near-term outlook remains clouded by speculative selling, long liquidation, and rate hike fears," Saxo Bank said.

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