Gold Hits $4,308 as Oil Supply Fears Ease
Gold prices climbed to $4,308.80 per ounce on Thursday. This rebound followed a slowdown in crude oil prices. The Federal Reserve raised rates by 25 basis points.
Gold climbed 1.1% to $4,308.80 per ounce by 0950 GMT. This price point marks a recovery from previous session losses. The move occurred as crude oil prices stabilized.
Silver rose 1.2% to $63.97 per ounce. The annual gain for silver stands at nearly 53%. Gold’s yearly increase is over 18%. These figures reflect shifting market dynamics.
Pipeline Restoration Eases Supply Tension
Saudi Arabia is restoring half of its East-West pipeline capacity. Full operation is expected within six weeks. This action cools crude prices that fueled inflation fears.
US Energy Secretary Chris Wright reported 18 million barrels passed through the Strait of Hormuz. This volume improved the supply outlook. Concerns over maritime trade disruptions have eased.
Fed Rate Hike Caps Gains
The US Federal Reserve raised its target range by 25 basis points. The new range is 3.75% to 4.00%. This is the first increase in three years.
Fed Chair Kevin Warsh cited elevated inflation data. Core US inflation rose more than expected in August. The central bank signaled further tightening before year-end.
Higher Rates Increase Holding Costs
Higher interest rates weigh on precious metals. They increase the opportunity cost of holding non-yielding assets. Yield-bearing investments become more attractive. GN auto markets/commodities: gold prices notes this structural shift.
