Gold prices held nearly steady on Thursday after touching a six-month low, as a softer-than-expected U.S. jobs report provided some support for the precious metal.

However, persistent inflationary pressures and renewed Middle East tensions kept overall sentiment cautious ahead of next week’s Federal Reserve meeting under new Chair Kevin Warsh.

Spot gold was little changed at $4,076.88 per ounce by mid-morning U.S. trading, after dipping to its lowest level since November 21 earlier in the session. U.S. gold futures for August delivery fell 0.9% to $4,097.10. The metal has faced sustained pressure since the U.S.-Israeli conflict with Iran erupted in late February. Rising oil prices have fueled expectations of prolonged higher interest rates, which raise the opportunity cost of holding non-yielding assets like gold.

While gold is traditionally viewed as an inflation hedge, the combination of elevated rates and a stronger dollar has weighed heavily on its performance.

David Meger, director of alternative investments and trading at High Ridge Futures, highlighted the conflicting forces at play.

“A weaker jobs market at this point would be supportive of gold prices. But we saw inflation data both yesterday and today showing that inflationary pressures continue to rise; the potential for higher interest rates has been supporting the dollar and pressuring the gold market,” he said.

Inflation and Labor Data Fuel Rate-Hike Expectations

U.S. producer prices rose more than expected in May, with the annual wholesale inflation rate hitting 6.5%. This followed Wednesday’s consumer price report, which showed inflation climbing at its fastest pace in three years, driven largely by surging energy costs tied to the Iran war.

Weekly jobless claims for the week ended June 6 rose to 229,000, topping Reuters forecasts of 219,000. While still indicating a relatively resilient labor market, the uptick offered some relief to gold bulls hoping for signs of cooling that might temper Fed hawkishness.

Bond yields were largely steady after the hotter-than-expected wholesale inflation print. The benchmark 10-year Treasury note yield was flat at 4.548%, the 2-year gained 3 basis points to 4.158%, and the 30-year held near 5.02%. The dollar remained firm, reflecting expectations of tighter monetary policy.

Clark Bellin, investment chief at Bellwether Wealth, said the data reinforces a hawkish tilt.

“Thursday’s elevated PPI print is yet another data point that could push the Federal Reserve to hike interest rates, as it’s clear that all of the main measures of inflation are flashing red,” he said.

Markets are now pricing in a roughly 69% chance of a quarter-point rate hike by December, according to the CME Group’s FedWatch tool. This marks a notable shift from earlier expectations of easing under Warsh, who has previously signaled openness to lower rates but now faces a more complicated inflation backdrop.

Oil prices spiked back above $90 per barrel after President Trump threatened further military action against Iran, including the potential seizure of its oil infrastructure. In a Truth Social post, Trump warned of striking “VERY HARD TONIGHT.” Brent crude and WTI both rose sharply in response, underpinning how quickly geopolitical flare-ups can transmit inflation risks through energy costs.

Iran has announced total closure of the Strait of Hormuz, with the U.S. responding that Washington is in charge of the transit point. The latest development is expected to keep global energy supplies tight and contribute to the recent inflation surge. Even as some diplomatic efforts continue, the risk of prolonged disruption remains a key variable for markets.

The Implications Keep Widening

The combination of resilient labor data and sticky inflation puts the Federal Reserve in a challenging position as it prepares for its first meeting under Warsh next week. The central bank has held rates steady at 3.5%-3.75% since late last year, aiming for its 2% target. Persistent energy-driven price pressures could force a more hawkish stance, delaying anticipated cuts and supporting the dollar while pressuring risk assets.

Consumer sentiment has already deteriorated. The University of Michigan’s index has fallen for three consecutive months to historic lows, while a New York Fed survey showed households growing more pessimistic about inflation, job prospects, and layoff risks. Higher gasoline prices ($4.15 nationally, per AAA) and airline fares (up 26.7% annually) are squeezing household budgets heading into the summer season.

For the Trump administration, the inflation spike presents a messaging challenge. While the White House described the figures as “at-expectation” and pointed to declines in certain categories like prescription drugs and insurance, the energy component tied to the Iran conflict remains the dominant driver. Trump has continued to advocate for lower rates, telling reporters he does not view current fuel prices as particularly high “relatively speaking.”

Goldman Sachs economists said on Friday they no longer expect any Fed rate cuts this year, projecting rates will remain unchanged through 2026. JP Morgan Global Research has gone further, forecasting potential hikes by 2027 as the energy shock and labor market strength sustain inflationary momentum.

Looking ahead, gold’s muted reaction reflects the tug-of-war between supportive factors (softer jobs data, geopolitical safe-haven demand) and headwinds (higher yields, stronger dollar, and persistent inflation expectations). Analysts expect the metal’s performance to remain range-bound until there is greater clarity on the trajectory of the Middle East conflict and the Fed’s response.

In the near term, any de-escalation in the U.S.-Iran conflict could ease energy prices and provide relief to gold and risk assets. However, the current environment rewards caution, with gold retaining its role as a partial hedge even as higher rates limit its upside.

The disruption of energy flows through the Strait of Hormuz has triggered one of the most significant shifts in India’s energy import pattern in recent years, propelling the United States to the position of India’s largest supplier of liquefied natural gas (LNG) and liquefied petroleum gas (LPG).

What began as a geopolitical crisis in the Middle East is rapidly evolving into a structural realignment of global energy trade, with Washington emerging as the biggest beneficiary while India faces higher import costs and mounting pressure on its currency.

Data from Kpler shows that U.S. LNG exports to India surged to 900,000 tons in May, accounting for more than 40% of the country’s total LNG imports and representing a threefold increase from April. U.S. LPG shipments reached 630,000 tons, exceeding combined supplies from Gulf producers by roughly 60%.

The shift underscores how vulnerable India remains to disruptions in the Strait of Hormuz, a maritime chokepoint that handles a substantial portion of global energy trade. Nearly 60% of India’s LNG imports and almost all of its LPG supplies traditionally pass through the waterway.

The Middle East conflict may have accelerated the transition, but it did not create it.

India and the United States had already been deepening energy ties as part of a broader strategic relationship encompassing trade, defense, technology, and supply chain cooperation. Washington has long sought a larger share of India’s rapidly growing energy market, while New Delhi has sought to diversify away from excessive dependence on Gulf suppliers.

The latest disruption has effectively compressed years of market evolution into a matter of months. Energy analysts note that U.S. gas exports had historically struggled to compete with Middle Eastern supplies because of freight costs and shipping distances. Gulf producers typically enjoyed a significant landed-cost advantage in the Indian market.

The conflict altered that equation.

With shipping routes disrupted and regional supply chains facing uncertainty, reliability has become as important as price. That has opened the door for U.S. exporters to capture market share that previously appeared difficult to secure.

Why Gas Is Becoming The Centerpiece Of The Relationship

Unlike crude oil, where India sources supplies from a diverse group of producers, LNG offers significant room for expansion. India’s gas consumption is expected to rise steadily over the coming decade as policymakers attempt to reduce coal dependence, improve air quality, and support industrial growth.

“Going forward, the India–US energy trade will increasingly focus on gas,” Sumit Ritolia, lead research analyst at energy intelligence firm Kpler, told CNBC.

The United States is well-positioned to benefit from that trend because the country’s shale revolution has transformed it into one of the world’s largest gas exporters. Massive investments in export terminals along the Gulf Coast have created substantial capacity that can be directed toward high-growth markets such as India.

As new LNG export projects come online over the next several years, U.S. producers are expected to become even more aggressive in securing long-term contracts with Asian buyers.

Economic and Political Implications for India

The shift comes with both advantages and costs. On the positive side, greater reliance on American supplies enhances energy security by reducing concentration risk. Diversification becomes especially valuable during periods of geopolitical instability.

However, U.S. gas generally remains more expensive than supplies sourced from the Gulf. That cost differential matters for India, where energy affordability has major political and economic implications.

LPG, in particular, is highly sensitive because it serves as a primary cooking fuel for millions of households. Governments have historically intervened to shield consumers from sharp price increases, often through subsidies or pricing controls. Higher import costs, therefore, create fiscal challenges while also contributing to inflationary pressures.

The energy shift is also influencing India’s macroeconomic outlook. As one of the world’s largest energy importers, India is highly sensitive to fluctuations in global fuel prices. Rising energy costs widen the trade deficit and increase demand for dollars, putting pressure on the rupee.

Recent weakness in the Indian currency has been partly attributed to the growing energy import bill associated with the Middle East conflict. At the same time, increased purchases of American energy could help address a longstanding concern in Washington regarding India’s trade surplus with the United States.

U.S. policymakers have repeatedly pushed for measures that would reduce bilateral trade imbalances. Energy imports offer one of the fastest and most politically acceptable ways to achieve that objective. Unlike manufactured goods, energy purchases can be scaled up relatively quickly without disrupting domestic industries.

Winners and Losers

The immediate winner is clearly the United States. American LNG exporters are securing new market share in one of the world’s fastest-growing energy markets. The increase also supports broader U.S. strategic objectives in Asia by strengthening economic ties with India.

Bineet Banka, equity research analyst for energy at Nomura in India, told CNBC that Washington wants India to reduce its trade surplus with the U.S., “and higher energy imports may be the best way to do so.”

For Gulf producers, the picture is more complicated. While they remain indispensable suppliers to India and Asia more broadly, the disruption highlights the risks associated with geopolitical instability. Any prolonged uncertainty could encourage Asian buyers to further diversify their sourcing strategies.

The situation, however, presents a trade-off between security and cost for India. Diversification enhances resilience but raises expenses, at least in the short term.

A Lasting Shift?

The key question is whether the recent surge in U.S. exports represents a temporary response to geopolitical turmoil or the beginning of a more permanent transformation.

Several indicators suggest the latter.

India’s gas demand is expected to grow substantially over the next decade. The United States continues to expand export capacity. Strategic relations between Washington and New Delhi are strengthening. And companies on both sides are increasingly negotiating long-term supply arrangements.

Even if tensions in the Middle East eventually ease and Hormuz traffic normalizes, the experience has reinforced the importance of supply diversification. The end result could be a lasting reordering of global gas trade, with consequences extending far beyond the current conflict.