Gold rises above $4 400 as Trump comments ease inflation concern

Gold rose for a second day as US President Donald Trump appeared to rule out prolonged military action in the Middle East, easing inflationary concerns driven by a renewed spike in energy prices.

Spot bullion climbed as much as 1.2% to top $4 430 an ounce, after adding more than 1% the day before to snap a three-session decline. Oil’s rally halted after Trump said the latest attacks on Iran would likely be short-lived. The fighting had rekindled fears of faster inflation, a headwind for non-yielding gold.

The US dollar steadied on Thursday, following a sharp increase in the yen, a move that had traders on alert for any sign that authorities will take further action to support the Japanese currency. A weaker greenback can increase gold’s appeal for investors holding other currencies.

Gold is slightly higher this year following a volatile run of trading, setting a record in January before a four-month slump through to June. Prices then rebounded, as investors tracked the conflict in the Middle East, and sought to gauge whether the Federal Reserve would need to tighten policy. Signs of continued central-bank buying have also aided the commodity.

Fed Bank of New York President John Williams said on Wednesday that there’s evidence inflation continued to ease, as the impact of tariffs faded while higher energy prices were not spreading to other services. That tempered expectations of a rate hike, which was further supported by data showing US companies added jobs at a more moderate pace in August.

“Markets from gold to bonds are increasingly prone to higher-amplitude, two-way moves” as attention shifts to data before the next Fed meeting, including payrolls on Friday, said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. Sharp swings in oil have added macro uncertainty, he said.

Last week, a hawkish speech by Fed Chairman Kevin Warsh at the Jackson Hole meeting raised expectations the bank may lift rates to contain inflation. The policy-setting Federal Open Market Committee next meets in mid-September.

“With Warsh stopping short of signaling a specific meeting outcome, incoming data now take on greater weight in determining the near-term policy path,” said OCBC’s Wong. “That leaves markets susceptible to outsized repricing, overshoots and reversals around key releases.”

Spot gold rose 1% to $4 427.09 an ounce at 11:46 a.m. in Singapore. Silver was up 1% at $65.94 an ounce, while platinum and palladium also advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after falling 0.2% in the previous session.