Gold gains

Gold rose on Thursday on ‌dip-buying, but was on track for a second straight monthly fall as elevated oil prices kept fears of inflation and higher-for-longer interest rates alive.

Spot gold was up 1 percent at $4,588.09 per ounce, as of ​0736 GMT, after falling to its lowest point since March 31 in ​the last session. Bullion was down about 1.7 percent so far this month.

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US gold futures for June delivery rose 0.4 percent to $4,578.10.

“Gold has struggled again this month ​as oil strength has dominated the narrative. Rising crude pushes up inflation expectations and interest ​rate forecasts, which in turn caps gold’s appeal,” said Tim Waterer, chief market analyst at KCM Trade.

However, “a combination of bargain-hunting and expectations that a peaceful resolution to the (US-Iran) conflict will be found at ​some point are providing something of a floor for gold,” he said.

Brent crude ​rose above $124 a barrel on a report that the US was considering potential military action against Iran to ‌break ⁠the deadlock in negotiations to end the war, increasing concerns about more supply disruptions to already curtailed Middle East exports.

The Federal Reserve held interest rates steady on Wednesday, but in its most divided decision since 1992 noted rising concerns about inflation in a policy ​statement that drew ​three dissents from officials ⁠who no longer feel the US central bank should communicate a bias towards lowering borrowing costs.

Traders are now pricing in no ​Fed rate cuts this year, with markets seeing a 30 percent chance ​of a ⁠hike by March 2027, sharply up from roughly 5 percent a day prior.

While gold is traditionally seen as a hedge against inflation, high interest rates weigh on its appeal as ⁠a non-yielding ​asset.