Gold gains to $4,126 as markets await Fed decision

July 23, 2026 (MLN): Gold prices traded little changed on Thursday after touching a two-week high in the previous session, as escalating tensions in the Middle East boosted oil prices and heightened inflation concerns, while investors awaited next week's U.S. Federal Reserve policy meeting for signals on future interest rates.

Currently, spot gold is up 1.07% to $4,126.91 an ounce as of [10:40 am] PST, according to data reported by Mettis Global.

Market sentiment remained cautious after oil prices climbed to their highest level in more than six weeks following fresh U.S. strikes on Iran and attacks by Yemen's Houthis on oil tankers in the Red Sea, raising fears of renewed energy supply disruptions.

The U.S. dollar slipped 0.1%, making gold less expensive for buyers using other currencies and providing some support to bullion prices.

Meanwhile, the yield on the two-year U.S. Treasury note climbed to its highest level in 17 months as investors priced in the possibility that higher energy costs could revive inflationary pressures, according to CNBC.

The Federal Reserve is widely expected to leave interest rates unchanged at its policy meeting next week. However, financial markets continue to anticipate at least one additional rate hike before the end of the year.

According to the CME FedWatch Tool, traders currently assign a 77% probability to a rate increase in September.

Higher interest rates generally reduce the attractiveness of gold because the precious metal does not generate interest income.

In Europe, the European Central Bank is expected to keep borrowing costs unchanged on Thursday, though policymakers are likely to maintain the option of another rate increase later this year.

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