Gold Edges Up Amid Mideast Conflict, Interest Rate Hike Fears
Gold prices inched up above $4,060 an ounce on Friday as market participants weighed the impact of the escalating conflict in the Middle East and potential interest rate hikes by the Federal Reserve.
The metal's upward momentum comes despite a recent drop of 0.7% earlier in the session and 2% the day before.
The Iran war has stoked inflationary pressures, which alongside a resilient US labor market increase the possibility of higher borrowing costs, a headwind for non-yielding bullion like gold.
Swap traders see a roughly 30% chance the Fed will lift rates at next week's meeting, with at least one hike priced in by the end of the year.
Commerzbank AG analysts wrote that despite rising oil prices and concerns about interest rates, the price has held above $4,000 per troy ounce, making a significant move unlikely from next week's Fed meeting.