Gold Prices Rebound Over 1% as Oil Prices Ease; Investors Watch US Interest Rate Outlook

International gold prices climbed more than 1% on Thursday, recovering from the previous session`s sharp decline, as falling crude oil prices reduced inflation concerns and renewed investor interest in safe-haven assets.

Spot gold rose 1.4% to $4,316.42 per ounce, after dropping 1.7% on Wednesday. However, U.S. gold futures for August delivery slipped 1% to $4,336.70 per ounce.

The recovery in gold prices comes after oil prices declined following the release of details of an interim agreement between the United States and Iran. The agreement extends the existing ceasefire by another 60 days, allowing both countries more time to negotiate a long-term peace arrangement.

Lower oil prices generally help reduce inflation pressures. However, investors remain cautious after the U.S. Federal Reserve signaled that interest rates could rise later this year.

According to the latest Federal Reserve projections, 9 out of 19 policymakers expect at least one interest rate hike before the end of 2026. Following the announcement, market expectations for a December rate hike increased significantly.

Higher interest rates typically limit gains in gold because the precious metal does not offer interest income, making other investments more attractive.

Meanwhile, other precious metals also gained:

- Silver rose 1.8% to $69.18 per ounce

- Platinum increased 1.2% to $1,757.53 per ounce

- Palladium advanced 1.3% to $1,329.99 per ounce

Market Outlook: Analysts expect gold prices to remain range-bound in the near term as investors closely monitor U.S. interest rate decisions, inflation trends, and developments in the Middle East.