Gold prices see slight moves as traders watch Federal Reserve and oil markets

Gold prices moved in a narrow range during early trading as investors weighed shifting expectations for Federal Reserve interest rates against rising oil prices. Bullion traded near $4,170 an ounce following a 1.6 percent jump on Thursday, which marked its biggest gain in more than two weeks. ## Market Pressures Fed Chair Kevin Warsh spoke in Bangkok, leaving intact expectations that the central bank will hold rates steady later this month. Following his remarks, traders cut bets on a quarter-point rate hike from a one-in-three chance down to about roughly 15 percent. Higher interest rates typically hurt gold prices because the metal does not pay interest to holders. Meanwhile, Brent crude oil touched $110 a barrel for the first time since May, pushing Treasury yields higher and creating a headwind for the precious metal.

Expert View

Gerald Gan, who serves as the chief investment officer at Reed Capital Partners, noted that Warsh is deliberately trying to cool hawkish rate expectations and bring back some stability to the Treasury market. Gan added that while inflation stays a worry and future tightening cannot be ruled out, the recent tone points to little urgency for back-to-back rate hikes. Gold has dropped about a fifth since the US and Israel launched a war on Iran in late February, which disrupted energy markets and drove up inflation, prompting the Fed to raise rates last month for the first time since 2023. ## Context Precious metals like gold are frequently viewed by investors as a safe place to put money during times of global conflict, high inflation, and economic uncertainty. When central banks lift interest rates to fight rising prices, investors often prefer bonds and other assets that pay regular interest over gold.