Gold Recovers as Oil Dips, Fed Rate Hikes Loom

Gold prices showed recovery towards the end of a volatile trading week, with bullion valued around $4,350 an ounce.

This rebound occurred as oil prices fell, alleviating concerns about inflation. Supply disruptions in the Middle East appeared to be easing, contrasting with earlier worries that elevated energy prices would necessitate prolonged high interest rates.

In recent weeks, investors have demonstrated a significant appetite for gold. This is evidenced by gold-backed exchange-traded funds (ETFs) experiencing inflows for eight consecutive days, the longest such streak observed since October 2025.

Analysts from Goldman Sachs Group Inc. anticipate that the Federal Reserve's interest rate hikes will likely slow gold's rally rather than halt it. They recently adjusted their year-end price target for gold from $4,900 to $4,650 per ounce.

This resilience is attributed to factors such as anticipated tightening already being priced into ETF demand, ongoing central bank purchases offsetting higher rates, and persistent demand for gold as a hedge against macro-policy risks.