Gold Treads Water as Oil Surges and Rate Hike Bets Rise

Gold prices held steady on Thursday after falling nearly 2% the previous day as investors weighed the impact of rising oil prices and strong US economic data on interest rate hikes.

The price of gold, which has been influenced by the Federal Reserve's rate outlook in recent weeks, hovered around $4,290 an ounce. Oil surged after Iranian President Masoud Pezeshkian told the United Nations that his country would not allow freedom of navigation through the Strait of Hormuz while sanctions and a US blockade remain in place.

The increase in oil prices has fueled concerns about inflationary pressure, which could prompt further interest rate hikes. Fed governor Michael Barr noted that additional rate increases are likely needed to return inflation to the central bank's 2% target. Swap markets currently price in at least three hikes by April 2027.