Gold slips below $4,200 as oil rallies and Fed outlook tightens

Gold slipped below $4,200 an ounce, erasing earlier advances that had pushed it to a one-week peak. The metal’s dip coincided with Brent crude futures hitting a two-week high as the fragile Russia-Ukraine energy ceasefire unraveled and Houthi militants struck Saudi facilities. Since the US-Iran conflict began in late February, gold has lost about 20%, reflecting inflationary pressure from disrupted energy supplies and tighter monetary policy.

While elevated bond yields and expectations of additional Federal Reserve tightening pressure gold, robust demand from gold-backed exchange-traded funds and buying by the People’s Bank of China have kept the price above $4,000. Commodity analyst Manav Modi highlighted the challenging macro backdrop, citing persistent inflation and possible further Fed action. Markets also await Fed Chair Kevin Warsh’s remarks at the IMF meeting in Bangkok and upcoming US inflation data.