Gold prices remained near historic highs on Thursday as rising inflation pressures in the United States strengthened expectations that interest rates may stay elevated for longer.
Spot gold traded around USD $4,700 per ounce after slipping 0.6% the previous session, following fresh data showing U.S. wholesale inflation accelerated in April at its fastest pace since 2022. At the same time, benchmark 10 year Treasury yields climbed toward their highest levels since July, creating additional pressure on non yielding assets such as gold.
Despite the pullback, bullion continues to hold firm near record territory as investors increasingly seek protection against inflation, geopolitical instability and growing concerns surrounding global economic growth.
Markets are also closely watching developments at the Federal Reserve after the U.S. Senate narrowly confirmed Kevin Warsh as the new Federal Reserve Chair. The appointment has sparked debate over whether the central bank can maintain its independence amid mounting political and economic pressures.
Gold previously surged to record highs earlier this year as investors questioned the long term stability of monetary policy and the ability of central banks to contain inflation without damaging economic growth.
Fresh inflation data this week showed U.S. consumer prices rising 3.8% year on year in April, the fastest pace since 2023. Energy costs continue to climb sharply, with gasoline prices reportedly up around 50% since the outbreak of the Iran conflict. Rising prices across housing, food, clothing and airfares are also adding to inflation concerns globally.
Gold has largely traded within a tight range since the early stages of the Iran war triggered heavy volatility across financial markets. Investors are now balancing the risk of persistently high inflation and higher interest rates against slowing economic growth that could eventually force central banks to begin cutting rates again.
The ongoing conflict has also intensified uncertainty across commodity markets, shipping routes, currencies and global bond markets, reinforcing demand for traditional safe haven assets.
Silver continues to outperform, surging 18% so far in May. Analysts say speculative trading activity, tightening supply concerns and strength in copper markets have all contributed to silver’s explosive rally. Momentum across silver, copper and zinc remains strong as investor positioning in the metals sector continues to build.
Spot silver was last trading near USD $86.97 per ounce, while platinum and palladium both moved lower during Thursday trading.
