The fact that gold and oil are climbing together, rather than moving inversely, suggests both markets are still pricing genuine geopolitical risk rather than one simply offsetting the other on any given day. A likely steady Fed rate path through 2026 removes a headwind that had been weighing on gold for much of the conflict, when rising yields and dollar strength appeared to dominate whatever safe-haven bid the war generated. Layered on top of that, persistent central bank buying, led by China, continues to act as a structural floor under gold independent of the day’s headlines. Momeni’s outreach to Islamabad is a small signal rather than a breakthrough, but even a modest diplomatic opening, combined with a steadier rate outlook and official-sector demand, gives gold several distinct sources of support at once.
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A quiet diplomatic overture out of Tehran, a steadier Fed, and China’s buying spree are all pulling gold the same direction at once.
Summary:
- Iran’s Interior Minister Eskandar Momeni visited mediator Pakistan and asked Islamabad to continue its efforts, a rare sign that diplomacy remains alive
- Spot gold rose circa 0.9% to around $4,114 an ounce, its highest since July 10, while US gold futures jumped roughly 1% to around $4,119.
- The gold move was driven mainly by technical buying, with investors also positioning ahead of next week’s Federal Reserve meeting
- Oil climbed more than 1% to trade near its highest level in around six weeks, with two tankers carrying Saudi crude to Asia having reversed course in the Red Sea on Tuesday after Houthi threats.
- A Reuters poll of economists produced median forecasts showing the Fed is expected to hold its key rate steady for the rest of 2026.
- Goldman Sachs said earlier this week that persistent central bank buying, led by China, continues to provide a price floor for gold, maintaining a year-end target near $4,900.
A rare sign of diplomatic life around the Iran conflict emerged on Wednesday, with Iran’s Interior Minister Eskandar Momeni visiting mediator Pakistan and asking Islamabad to continue its efforts, according to a Reuters report, even as gold and oil both pushed higher on the underlying conflict that has dominated markets this week.
Spot gold rose circa 0.9 percent to around 4,130 dollars an ounce, its highest level since July 10, while US gold futures for August delivery jumped. The move was driven partially also by investors positioning ahead of next week’s Federal Reserve meeting, expected to be on hold.
The gold move came even as oil pushed higher rather than pulling back, with analysts noting crude climbed more than 1 percent to trade near its highest level in around six weeks. Two tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats from Yemen’s Iran aligned Houthis, as a widening conflict continued to disrupt shipping through two of the world’s most critical energy chokepoints. That gold and oil are rising together, rather than moving inversely, points to both markets still pricing genuine geopolitical risk rather than one simply mirroring moves in the other.
On rates, a poll of economists produced median forecasts showing the Federal Reserve is expected to keep its key interest rate steady for the remainder of 2026 as it continues tackling a five year long inflation problem. That steady rate path removes one potential headwind that had weighed on gold earlier in the conflict, when rising yields and a firmer dollar appeared to outweigh whatever safe haven demand the war itself generated.
Beyond the immediate newsflow, the structural buyer base under gold remains intact. Goldman Sachs said earlier this week that persistent central bank buying, led by China, continues to provide a price floor for the metal even amid pressure from a hawkish rate outlook, maintaining its year end target near 4,900 dollars. With Momeni’s visit to Islamabad offering at least a small opening for renewed talks, alongside a steadier rate backdrop and continued official sector demand, gold’s latest push to a near two week high looks to be drawing support from several directions at once rather than any single catalyst.
Next stop!
This article was written by Eamonn Sheridan at investinglive.com.
