Gold steadies amid Hormuz crisis — Prices flat as investors weigh risks

Gold prices held broadly steady after a two-day decline as markets balanced renewed Strait of Hormuz tensions with uncertainty around the Federal Reserve’s policy stance. Investors remained cautious amid mixed signals on growth and inflation.

Market participants said movements in the metal were primarily driven by geopolitical developments in the Hormuz corridor and shifts in global liquidity. Reports that disruptions in the strait were keeping oil price volatility elevated supported safe-haven demand for gold, while a softer dollar provided limited upside. At the same time, anticipation around the Fed’s meeting constrained significant rallies.

Technically, spot gold (XAUUSD) showed signs of stabilising after the pullback, though trading volumes remained muted. Energy market dynamics and higher oil prices are complicating the inflation outlook, which could influence central bank decisions and in turn weigh on non-yielding assets such as gold. Traders are watching both macroeconomic data and geopolitical headlines for directional cues.

The broader context sees the Hormuz developments affecting energy security and global inflation expectations. Sustained disruptions to shipping through the strait have kept oil markets on edge, amplifying concerns about a potential inflation uplift that could prompt a firmer policy response from central banks — a headwind for gold despite its safe-haven appeal.

Analysts expect gold to remain sensitive to headline risk in the near term. Absent clear signs of easing in the Middle East or a shift in Fed guidance, investor flows into safe-haven assets may persist intermittently, while a decisive move in oil or inflation data could re-rate gold’s trajectory. Market participants broadly favour a cautious approach until greater clarity emerges.