Gold – war and high inflation, so why isn't gold going up?

Gold is trading around $4,580 today. That looks high, but gold actually slipped over the past month — even with a war in the Middle East and US inflation at a three-year high. Many new traders expect gold to jump during times like this. So why isn't it?

The answer is interest rates. Gold pays no interest. When banks and government bonds pay high interest, investors prefer them over gold. Right now, the US Federal Reserve is expected to keep interest rates high for a long time — and might even raise them — because inflation is too high. High rates make gold less attractive, and that holds the price back.

There's still support underneath. China's central bank has bought gold for 17 months straight, and the war keeps some investors holding gold as a safe place for their money. But for now, the interest-rate story is stronger.

This week's big event is the US jobs report. Strong jobs support "high rates for longer" and put pressure on gold. Weak jobs could help gold bounce.

Key levels:

• Resistance: $4,600, then $4,650 and $4,700
• Support: $4,500, then $4,450 and $4,400

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