Gold Holds Firm Despite Hawkish Fed Outlook and Rising Oil Prices

Gold markets posted a strong recovery last week as investors balanced improving economic sentiment against persistent geopolitical uncertainty and inflation risks. Spot gold rose more than 2% over the week, climbing back toward the US$4,730–$4,750/oz range after rebounding from early May lows. Safe-haven demand remained the primary driver, fueled by renewed tensions surrounding US-Iran relations, uncertainty over the Strait of Hormuz, and concerns that ceasefire negotiations may be deteriorating. Reports that President Donald Trump was considering renewed military action against Iran further supported defensive positioning in bullion markets.

At the same time, stronger corporate earnings and resilient US labor market data helped global equity markets advance, while Treasury yields and the US dollar softened. These conditions provided additional support for gold, although upside momentum remained capped by lingering hawkish expectations from major central banks. The Federal Reserve, ECB, BoE, and BoJ all held interest rates steady, but policymakers continued signaling caution on inflation, particularly as rising oil prices threaten to reignite price pressures globally.

Technically, gold traded just below important resistance levels near its 50-day and 100-day moving averages around US$4,760–$4,785. Momentum indicators suggest a consolidative market rather than a decisive breakout, with traders closely watching whether prices can sustain a move above the key US$4,775 resistance zone. Support remains near the 21-day moving average around US$4,697.

Investor attention is now shifting toward upcoming US inflation data, particularly core CPI figures, which could significantly influence Federal Reserve expectations and determine gold’s next major directional move.