Gold prices climbed above $4,350 as a drop in crude oil below $100 and a 1.25% rate hike from the Bank of Japan provided a temporary reprieve from hawkish Federal Reserve policy.
Gold rebounded from a post-FOMC low near $4,260/oz to above $4,350/oz, helped by lower oil prices and a Bank of Japan hike, but elevated rate expectations and yields remain a headwind.
Crude oil slid from above $105 per barrel to below $100, acting as a pressure-release valve across financial markets and supporting gold's rebound.
The Bank of Japan's rate hike to 1.25% narrowed the US-Japan rate gap and lessened the appeal of the yen carry trade, which tends to weaken the US dollar against the yen.
Gold prices recovered from a post-FOMC low of $4,260 to trade above $4,350 per ounce, buoyed by a sharp decline in crude oil prices and a surprise rate hike from the Bank of Japan. Despite the rebound, the Federal Reserve's hawkish outlook for 2026 and elevated Treasury yields continue to pose significant headwinds for the precious metal.
Gold rebounded primarily due to a technical correction in crude oil prices, which fell below $100 per barrel, and a surprise rate hike from the Bank of Japan that reduced the appeal of the yen carry trade.