Gold steadies as Fed’s Powell signals inflation under control

Gold prices held firm on Tuesday, extending recent gains after Jerome Powell signalled that long-term inflation expectations in the United States remain under control, even as geopolitical tensions in West Asia continue to roil global markets.

Bullion hovered near $4,510 an ounce in early Asian trading, building on a 0.4 per cent gain in the previous session. The precious metal has found support from a mix of safe-haven demand and cautious central bank messaging, with investors weighing the inflationary impact of elevated oil prices against a still-measured policy stance from the Federal Reserve.

Powell struck a balanced tone, indicating that the central bank is in “a good place to wait and see”, suggesting no immediate urgency to tighten policy despite rising energy costs linked to the ongoing conflict in West Asia. His comments have helped temper fears of aggressive rate hikes, a factor that typically weighs on non-yielding assets like gold.

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The current price stability also reflects renewed interest from dip buyers. After retreating from recent highs in the early phase of the conflict, gold has seen investors step back in, betting that prolonged geopolitical uncertainty will continue to underpin demand.

At the same time, developments in the region have kept markets on edge. Oil prices moved higher after the White House signalled the possibility of intensifying its stance against Iran, including potential action targeting key infrastructure. Tehran, in turn, has approved measures to impose fees on vessels passing through the Strait of Hormuz — a critical artery for global energy supplies — while also stepping up pressure via allied groups in the Red Sea.

Such moves have reinforced concerns about supply disruptions, feeding into inflation expectations globally. However, Powell’s assertion that longer-term inflation remains anchored has provided some reassurance to markets, limiting volatility in gold.

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Spot gold was last up 0.1 per cent at $4,515 an ounce in early Singapore trading. Among other precious metals, silver gained 0.2 per cent to $70.21, while palladium edged higher and platinum remained largely unchanged.