Gold holds near £3,250 as Fed rate hike bets clash with Middle East tensions

Gold held close to £3,250 a troy ounce this week, based on wholesale price tracking, as two opposing forces pulled the market in different directions. On one side, traders are pricing in roughly a 60% chance that the US Federal Reserve raises interest rates by a quarter point this month, after a stronger than expected US jobs report. Higher rates tend to weigh on gold because it pays no interest or dividend, so bonds and savings become relatively more attractive by comparison.

On the other side, tensions in the Middle East have kept a floor under prices. Reports of Houthi attacks on Saudi energy sites and Iranian action near the Strait of Hormuz pushed Brent crude close to $97 a barrel, reviving inflation worries that can, at times, support demand for gold as a hedge.

In dollar terms, gold is trading around $4,400 an ounce, roughly 22% below its January record of about $5,589. For UK buyers, that translates to a spot price near £3,250, though the pound you actually pay a dealer will run higher once premiums are added: currently a range of roughly 1% to just under 5% over spot across the dealers we track, before postage or insurance. As ever, this is market information, not investment advice.