(RTTNews) - Gold prices traded sharply higher on Thursday, rebounding from a one-month low hit in the previous session as a sharp rise in oil prices to four-year highs fueled inflation concerns.
Sentiment was also shaped by the U.S. Federal Reserve's status-quo decision on interest rates for the third straight meeting.
The Fed on Wednesday held rates on hold, as was widely expected, in the most divided FOMC vote since October 1992.
Spot gold jumped 1.8 percent to $4,626.50 an ounce while U.S. gold futures were 1.7 percent higher at $4,638.56.
Oil prices have jumped to their highest since 2022 amid stalled U.S.-Iran talks and concerns that supply disruptions could persist longer than initially expected.
The dollar index was a tad lower in European trading after reaching its highest level in more than two weeks earlier.
Media reports suggest that the U.S. is preparing to launch a series of 'short and powerful' strikes on Iran, which would bring an end to a fragile ceasefire.
Tehran released new visuals showcasing troop preparations and combat readiness, warning that any escalation could lead to serious consequences.
The U.S. is also seeking international help to restore freedom of navigation in the Strait of Hormuz. Two months into the war, the closure of the waterway has taken about a seventh of the world's oil supply offline.
Concluding his final news conference in the role, Fed Chair Jerome Powell said on Wednesday that the energy price surge has not yet peaked and that a prolonged oil shock could intensify its effect on the global economy and monetary policy outlook.
Powell also said he would not leave the Fed board until legal challenges posed by President Trump are "well and truly over."
Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan supported keeping rates unchanged but "did not support inclusion of an easing bias in the statement at this time," signaling a subtle shift toward a more hawkish stance.
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