Gold Holds Above $4,000 Amid Middle East Tensions and Oil Price Rally

Gold prices have stabilized above $4,000 per ounce despite rising tensions in the Middle East and concerns over tighter monetary policy.

The conflict in the region has led to a rally in oil prices, which reached $100 a barrel on July 24. However, oil retreated slightly after hitting this milestone, with crude's recent surge stoking inflationary pressures that could lead to interest-rate hikes.

Swap traders currently see a 30% chance of the Federal Reserve lifting rates at its next meeting, and at least one hike is priced in by the end of the year. Analysts at Commerzbank AG noted that despite strongly rising oil prices, gold has held above $4,000 per troy ounce.

Gold has hovered around $4,000 since late June, which some traders see as a key support level. It's down by roughly a quarter since the US and Israel launched strikes on Iran in late February, helping to end a multiyear bull run that had carried the metal to a record near $5,600.

The US announced it will collect duties of 10 to 12.5% on imports from most major trading partners, alleging forced labor in their supply chains. This move has added to uncertainty surrounding gold prices.