Gold rebounds from nine-week low as Hormuz tensions cloud rate outlook

Gold prices recovered on Thursday after falling to their lowest level since early August, but renewed tensions around the Strait of Hormuz kept inflation and interest-rate risks in focus.

At 05:04 GMT, spot gold rose 0.6% to $4,133.60 an ounce, while gold futures gained 0.4% to $4,157.45. Silver advanced 0.4% to $60.05, and platinum climbed 2.07% to $1,667.82. The U.S. Dollar Index was little changed at 102.24.

The rebound followed pressure from a stronger dollar and elevated Treasury yields. Gold pays no interest, so higher returns on bonds can make bullion less attractive to investors.

Hormuz tensions add another complication. Disruptions to energy shipments can lift oil prices and feed inflation, potentially encouraging the Federal Reserve to keep monetary policy tighter for longer.

Markets continued to expect another rate increase this year, with December seen as more likely than October. Minutes from the Fed’s September meeting showed differences over whether tightening was needed mainly to contain energy shocks or address broader demand-driven inflation.

That leaves gold facing competing forces. Geopolitical uncertainty can support demand for defensive assets, while the same conflict’s inflationary effects can raise yields and weigh on bullion.

Thursday’s recovery offers some relief, but the outlook remains sensitive to energy prices, the dollar and further signals from Fed policymakers.

Market Insight:

Gold’s rebound could remain fragile if oil-driven inflation lifts yields. Watch Hormuz developments and Fed guidance for shifts in demand for defensive assets.