Gold climbs to £3,041 per ounce as rate-hike fears ease and central banks keep buying

Gold has climbed to around £3,041 per ounce, posting its first weekly gain in about a month. The rise reflects easing bets on a near-term Federal Reserve rate increase, a shift that tends to support prices because gold generates no income and becomes less attractive when rates rise.

Two forces are at play. Safe-haven demand remains firm, driven by ongoing Middle East tensions and elevated oil prices around the Red Sea and Strait of Hormuz. These geopolitical pressures have kept inflation worries alive. Working against this, US government bond yields remain in the mid-4% range, which narrows gold's appeal. Markets now expect the Federal Reserve to hold interest rates steady at its next meeting, easing earlier concerns about more tightening ahead.

Central bank buying continues to provide a floor under prices. China's central bank added reserves again in June, marking a twentieth straight month of purchases. Despite gold's worst quarter since 2013, the metal still trades about 20% above its level a year ago.

For UK buyers, a key advantage: investment-grade gold is exempt from VAT, unlike silver which carries 20%. The all-in cost—spot price plus dealer premium and any delivery fees—is what matters most when comparing offers. This is general information, not financial advice.