Gold Loses Its Glitter as Fed Rift and Mideast Thaw Hit Bullion

Gold edges up but weekly slide persists as FOMC reveals deepest split since 1992, Middle East tensions ease, and US Treasury yields hit 17-year highs, boosting the dollar and raising gold's opportunity cost.

Gold is fighting for a foothold, but the forces that propped it up are fading fast. The precious metal edged up 0.29% to $4,498.40 an ounce on Wednesday, yet that blip barely masks a bruising weekly slide of 4.23%. The real story lies in two tectonic shifts: a historically fractured Federal Reserve and signs of cooling tensions in the Middle East.

The central bank’s internal rift has widened into a chasm. Minutes from the 29 April FOMC meeting, released at 18:00 GMT, revealed that four of the twelve voting members dissented against either the decision to hold the target range at 3.50%-3.75% or the accompanying statement. That marks the deepest split since 1992. With only a 2.6% probability of a rate cut in June now priced into futures markets, the message is clear: monetary relief is nowhere on the horizon.

Adding to the hawkish tilt, Kevin Warsh has been confirmed as the new Fed chair, with his swearing-in set for 22 May and his first policy meeting scheduled for 16-17 June. Seen as significantly more hawkish than Jerome Powell, Warsh inherits a deeply divided committee. Powell stays on as a governor, but the leadership change injects fresh uncertainty. For gold, which pays no yield, a longer stretch of elevated rates—or even fresh hikes—raises the opportunity cost of holding the metal.

That cost has already climbed sharply. The yield on the 30-year US Treasury hit 5.197%, the highest since July 2007, while the 10-year note sits comfortably above 4.6%. The dollar, meanwhile, reached a six-week high against a basket of currencies. For buyers outside the dollar zone, gold becomes more expensive with every greenback rally—a double whammy that saps global demand.

Inflation data has reinforced the Fed’s cautious stance. The April consumer price index rose 3.8% year-on-year, accelerating from March’s 3.3% reading. That leaves policymakers little room to ease, and it has kept bond yields elevated. The 30-day return on gold now stands at minus 7.09%, and the metal trades below its 50-day moving average of $4,689.14.

Geopolitical risks, which had been a key support for bullion, are also receding. Signals from Washington and Tehran have raised hopes of a diplomatic breakthrough. President Donald Trump said the conflict could end “very quickly,” while Vice President J.D. Vance spoke of serious interest in reaching an agreement. Market participants noted that Chinese oil tankers have left the strategically vital Strait of Hormuz, a move interpreted as a sign that escalation risks are fading. For gold, the safe-haven premium that had been priced in is now unwinding.

Physical demand remains robust—global gold demand hit $193 billion in the first quarter of 2026, with strong buying of coins and bars. Yet this has not been enough to counter the macro headwinds. Weak demand from India, one of the world's top gold consumers, adds further weight.

On the charts, the next key support lies between $4,350 and $4,409. A break below that zone would increase selling pressure. Resistance is pegged near $4,850. The near-term direction hinges on the tone of the Fed minutes and any fresh signals from the Iran talks. Should yields ease or geopolitical tensions flare anew, gold could quickly reverse course. But for now, the pendulum has swung firmly against the yellow metal.