Gold Stays Firm Near $4,000 as Geopolitical Tensions Clash With Fed Policy

The precious metals complex found stability late Thursday, recovering from three sessions of forced de-risking as May PCE inflation data showed a 0.4% monthly rise. With the 10-year Treasury yield slipping to 4.4%, non-yielding assets gained room to breathe. However, the June 17 Federal Reserve meeting remains the primary anchor for market sentiment. The FOMC’s decision to maintain the federal-funds target range at 3.50% to 3.75%, coupled with upward revisions to 2026 inflation and interest rate projections, suggests a higher-for-longer policy environment that keeps current rallies largely driven by short-covering.

Geopolitical risk remains a volatile undercurrent. While initial panic over shipping in the Strait of Hormuz faded as tanker traffic resumed, a late-session attack on a Singapore-flagged vessel injected fresh uncertainty. This resurgence of headline risk has kept a geopolitical bid for gold alive, even as oil prices fluctuate. Technically, bulls are currently focused on breaching the $4,020 to $4,040 resistance zone, while bears look for a breakdown below the $3,950 support level to signal a sharper correction.