Gold hovers near record as traders weigh inflation risks
Gold traded within a narrow range as investors weighed rising inflation risks against efforts to contain an oil supply shock triggered by the war in the Middle East.
Bullion rose by as much as 0.5%, holding above $5,000 per ounce after slipping 0.3% in the previous session, News.Az reports, citing Bloomberg.
Oil prices also moved higher following their first drop in nearly a week, as Iran intensified attacks on energy infrastructure in the Persian Gulf and the US prepared to release emergency crude reserves. U.S. President Donald Trump called on other nations to help secure the Strait of Hormuz, where shipping activity remains severely disrupted.
As the U.S.-Israeli war with Iran enters its third week and rising energy costs fuel inflation concerns, expectations for interest rate cuts by the Federal Reserve and other central banks have diminished. Traders now see almost no chance of a rate cut at the Fed’s upcoming meeting. Higher interest rates typically pressure gold, as the metal does not yield interest.
Despite this, gold has climbed about 16% this year, supported by geopolitical tensions and concerns over central bank independence, reinforcing its role as a safe-haven asset. While momentum has slowed since the conflict began on Feb. 28, fears of stagflation—marked by slow growth and high inflation—continue to underpin longer-term demand.
Demand for gold has remained particularly strong in China, where investors have consistently increased holdings in exchange-traded funds since returning from the Lunar New Year holiday on Feb. 24. Total inflows during this period have exceeded 17 billion yuan ($2.5 billion), according to Bloomberg estimates. Higher premiums in Shanghai compared to global prices also signal robust demand.
Spot gold was up 0.4% at $5,026.75 per ounce as of 12:20 p.m. in Singapore. Silver gained 0.9% to $81.50, while platinum and palladium also posted increases. Meanwhile, the Bloomberg Dollar Spot Index rose 0.1% after declining 0.6% in the previous session.
By Nijat Babayev
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