UK Gold Prices Rebound as Fed Rate Hike Bets Scale Back

Gold prices in the UK rebounded on Tuesday as traders scaled back their expectations of aggressive Federal Reserve rate hikes. The spot price for 24-karat gold touched £104.61 per gram, up £0.14 from the previous day.

This recovery comes after a week-long decline driven by strong US payrolls data and subsequent rate-hike bets that weighed on precious metals. Analysts at Goldman Sachs maintained their year-end target of $3,500 per troy ounce, citing structural demand from central banks and persistent geopolitical risk premium.

The World Gold Council reported a 12% increase in UK gold coin and bar investment demand in the second quarter, driven by retail investors seeking an inflation hedge. Investment-grade gold is VAT-exempt in the UK, while gold jewellery attracts a 20% VAT rate.