Gold holds three-day decline as hawkish Fed flags inflation risk

Published Thu, Apr 30, 2026 · 08:52 AM

[SINGAPORE] Gold held a three-day loss after a divided Federal Reserve kept US interest rates steady and said the war in Iran was clouding the economic outlook.

Bullion was near US$4,550 an ounce in early trading, having fallen 3.4 per cent over the previous three sessions. While the Fed’s decision on Wednesday (Apr 29) to keep rates unchanged was expected, the decision was accompanied by hawkish dissent from several policymakers, who objected to language in the post-meeting statement that suggested the central bank would eventually resume lowering rates.

Treasuries slumped, with two-year yields rising the most on a Fed decision day since 2022, as traders boosted bets the central bank may need to raise borrowing costs amid persistent inflation pressures. This would be a headwind for non-yielding bullion.

The 8-4 Fed vote, which marked the first time since 1992 that four officials dissented against a Federal Open Market Committee decision, revealed a deepening division over the outlook for policy due to the increased uncertainty caused by the war, which is now deep into its ninth week.

“The stagflation, higher-rates narrative is back in focus,” accelerated by the Fed’s hawkish leaning, Nicky Shiels, head of research and metals strategy at MKS PAMP, said. “The idea of Fed hikes is an underpriced new development for gold,” she said.

Bullion is set for a second monthly decline in April, as the conflict in the Middle East sends energy prices soaring. The slump has deepened in recent days, as progress on US-Iran peace talks has stalled and energy shipments via the Strait of Hormuz remain practically at zero. Gold has fallen about 14 per cent since the war began in late February.

On Wednesday, US President Donald Trump signalled the US will persist with a naval blockade of Iranian ports as it tries to choke Teheran’s oil exports and force it back to the negotiating table. Brent crude closed above US$118 a barrel, the highest since June 2022.

Spot gold edged up 0.1 per cent to US$4,552.01 an ounce at 7.33 am in Singapore. Silver rose 0.5 per cent to US$71.64 an ounce. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after ending the previous session up 0.4 per cent. BLOOMBERG