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WAM reported that gold prices faced short-term pressure during early Asian trading on Tuesday easing toward $4,443 per ounce at the time of publication. Spot gold slipped to $4,440.34 per ounce after holding near $4,454.68 earlier in the session. A surge in energy prices following recent geopolitical military exchanges has reinforced expectations that the Federal Reserve may maintain a hawkish monetary policy path adding near-term headwinds to non-yielding bullion.
Recent Reuters reporting detailed how escalating Middle East tensions pushed oil prices and U.S. Treasury yields higher heightening inflation concerns and reinforcing expectations of elevated U.S. interest rates. Oil prices remained near a one-month high as concerns over energy supplies increased after developments involving Iran and regional routes. Higher crude prices stoke inflation concerns raising expectations of elevated interest rates and denting gold’s appeal as a non-yielding asset according to the wire service.
A CNBC analysis found that while gold is often seen as an inflation hedge higher rates dampen bullion’s appeal since it offers no yield. A Reuters poll of economists showed the U.S. Federal Reserve will likely wait at least six months before cutting interest rates this year as war-driven energy shocks reignite already-elevated inflation. This dynamic has complicated gold’s usual safe-haven appeal in the current market environment.
Data from CME Group’s FedWatch tool referenced across multiple market updates has shown traders pricing in elevated chances of a Fed rate hike by December in comparable conditions. TradingView News reported that gold extended its retreat as investors weighed a stronger US labour market rising Treasury yields and another jump in oil prices. The combination has limited bullion’s attractiveness despite ongoing regional uncertainties.
A Finimize report from April 2026 indicated that with disruptions keeping crude high and rate cuts looking less likely investors dialed back demand for gold and other precious metals. South China Morning Post coverage noted that gold prices had fallen from peaks above $5,200 per ounce earlier in the year as oil remained elevated and central banks signaled caution on rate cuts. Brent crude futures have registered strong gains in recent months amid persistent instability in energy markets.
State Street Investment Management strategist Aakash Doshi told InvestmentNews that an oil price spike could prove a headwind for gold via the Fed policy channel giving the central bank less room to cut rates due to inflationary risks. Doshi added that crude oil impacts producer prices that feed down to consumers with effects on transportation and industrial sectors. This energy shock can boost the US dollar which serves as a potential headwind for gold through denomination effects according to the strategist.
