Gold Rallies 2% as Fed Holds Rates Steady Amid Middle East Tensions

Gold prices surged nearly 2% to reclaim $4,100 as the Federal Reserve held interest rates steady and geopolitical tensions in the Middle East escalated. The U.S. dollar and Treasury yields pulled back following the Fed's decision, propelling gold from negative territory to a gain of as much as 2% intraday.

The rally extended into Asian trading on Thursday, with New York gold futures closing sharply higher by more than 1.5%, firmly re-establishing spot prices above $4,100 per ounce. Spot gold rebounded forcefully from its lows on Wednesday to settle at $4,101.99 per ounce, a single-day gain of 1.9%.

Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP SA, stated that the Fed's decision could provide a rebound opportunity for asset classes that were previously overly shorted or out of favor, such as precious metals and bonds. 'There is growing conviction that this is a green light for the market to re-engage in buying gold in a big way,' she added.