Gold traded below $4,300 per ounce on Thursday, extending losses after a nearly 2% decline in the previous session, as signals from the US Federal Reserve pointed to growing support for interest rate hikes this year. Half of FOMC policymakers indicated that an increase in rates may be warranted in 202X, reflecting expectations that core inflation will remain higher than previously anticipated, partly due to the economic impact of the war in the Middle East.
At the same time, newly appointed Fed Chair Kevin Warsh declined to provide explicit guidance on the central bank’s next policy move, but stressed that inflation has been running above the Fed’s 2% target for several years and reiterated the institution’s commitment to bringing price growth under control.
On the geopolitical front, the US and Iran digitally signed an interim peace agreement, though uncertainty persists over whether Iran has begun taking concrete steps to fully reopen the Strait of Hormuz.
