Gold Holds Gain as Dip-Buying Counters Inflation Fears From War

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Or sign-in if you have an account.hw}m7t8[6ut4jw79vkl[s2d6_media_dl_1.png Bloomberg(Bloomberg) — Gold held gains on dip-buying even as hostilities in the Middle East pushed oil prices to multiweek highs, rekindling concerns that US inflationary pressure could prompt the Federal Reserve to raise interest rates.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountBullion was trading around $4,130 an ounce, after rising 3% over the previous two days as dip-buying supported prices. This came as the US and Iran signaled that they aren’t ready to return to the negotiating table after escalating attacks.Strikes on tankers transiting the Red Sea were also reported, the first since the conflict began in late February and potentially widening it. The waterway has been a vital workaround in particular for Saudi Arabian crude oil blocked behind the Strait of Hormuz. Yemen’s Iran-backed Houthis claimed responsibility. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againTraders are now weighing the impact of higher energy prices against soft US economic data as they scan for clues about the Fed’s path for interest rates. Elevated borrowing costs are a headwind for non-yielding bullion. Traders are split on whether or not the Fed will raise interest rates at its meeting next week, with the lack of forward guidance under new chair Kevin Warsh creating more uncertainty. Gold had largely moved in an inverse relationship to treasury yields during the conflict until holding above the $4,000 mark this week, which some traders see as a support level. It is still down by around a fifth since the US and Israel launched strikes on Iran in late February, after a multiyear bull run that had carried the metal to a record high near $5,600 the month before.Gold’s recent upside was “unusual” given the surge in energy prices following the latest flare-ups in the Middle East, Bart Melek, global head of commodity strategy at TD Securities, said in a note. “This rally does not seem to be an aggressive extension of long positions, but is rather driven by short covering and dip buying, after technical supports held during the preceding selloff,” he said.The higher-rate environment suggests that gold “may be destined to drop back to support at around $3,900 an ounce,” he said, adding that bullion may face imminent resistance at the $4,200 an ounce level. Spot gold was up 0.1% at $4,133.82 an ounce as of 8 a.m. in Singapore. Silver was stable at $59.75 an ounce. Platinum and palladium edged lower. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after ending the earlier session little changed.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.