Gold futures rose on Wednesday after U.S. President Donald Trump threatened what he termed the most severe economic measures yet against Iran, warning that any country aiding Tehran would face sweeping sanctions. The U.S. Treasury’s announcement of long-dated bond buybacks also contributed to the move, pushing U.S. public debt above $40 trillion for the first time.
Gold futures tested an intraday high of $4,583.83 before settling at $4,547.36, while oil prices climbed to nearly $94 per barrel, their highest since late July, as geopolitical tensions in the Strait of Hormuz tightened energy markets. Iranian Foreign Minister Abbas Araghchi dismissed the U.S. measures as a distraction from domestic issues, stating that the proposed sanctions would ultimately backfire on Washington.
Market reaction reflected a mix of risk aversion and positioning shifts. Short covering amplified the rebound in precious metals, while investors reassessed the Federal Reserve’s policy path following the central bank’s latest meeting. Despite some Fed officials advocating for a rate hike if inflation fails to ease toward the 2% target, markets are pricing only a one-in-three chance of a September increase, according to CME FedWatch data. Traders instead expect the Fed to maintain current borrowing costs, as it did in July.
Technical levels remain in focus as gold futures consolidate gains. On Wednesday, the contract opened at $4,567.79, briefly touching a session high of $4,596.85 and a low of $4,506.21 before closing at $4,564.50. The analysis suggests the metal is facing significant resistance at recent peaks, with indecisiveness persisting amid ongoing geopolitical uncertainty. The Strait of Hormuz remains a key chokepoint, and any prolonged disruption could further stoke energy-driven inflationary pressures.
Profit-taking remains a near-term risk, with investors reportedly quick to lock in gains at resistance levels. The week’s closing price will provide additional signals on direction, while attention shifts to Fed Chair Kevin Marsh’s remarks at the Jackson Hole symposium next week for further policy cues.
