Gold Edges Higher Amid Mideast Tensions and Tighter Fed Policy Expectations

Gold prices have edged higher above $4,000 an ounce as market participants weigh the impact of the Middle East conflict and potential interest rate hikes by the US Federal Reserve.

The widening hostilities in the region have fueled expectations for tighter monetary policy, which could lead to higher borrowing costs and negatively affect gold's price. Despite this, gold has managed to hold above the key resistance point of $4,000 an ounce, with prices currently trading at around $4,063.44.

Swap traders currently see a 34% chance of the Fed lifting interest rates at its upcoming meeting next week, and at least one hike is priced in by the end of the year. Analysts at Commerzbank AG note that despite rising oil prices and concerns about interest rates, the price has held above $4,000 per troy ounce.