Gold Rebounds to Seven-Week High Amid Weakening Dollar

Gold prices rebounded on Thursday to their highest level in seven weeks, reaching $4,265.22 an ounce as the dollar weakened and Treasury yields fell. The metal's four-day advance extended a trend that has seen rate expectations replace haven demand as the market's main driver.

The rally reflects a shift in the Middle East conflict's impact on gold prices. Initially, the fighting hurt bullion due to disruption of energy supplies, lifting oil prices and fueling inflation concerns. However, signs of a potential arrangement between Iran and Oman to restore shipping through the Strait of Hormuz have pushed crude lower, reducing fears of another energy-driven inflation shock.

Despite the rebound, gold remains 19% below its level when the US-Iran conflict began on February 28. The decline shows that geopolitical tension does not automatically help bullion when market expectations prioritize inflation and interest-rate consequences over safe-haven buying.

IG market analyst Tony Sycamore views the 200-day moving average as a crucial test for gold's technical picture, with the indicator near $4,490. A sustained break through that area could strengthen momentum and reopen a path towards $5,000.