Gold prices remained stable on Thursday, as recent U.S. data indicated a moderation in inflationary pressures. However, a new escalation in the Middle East conflict led to an increase in oil prices, reigniting worries about high energy costs and the possibility of interest rate increases. Spot gold remained relatively stable at $4,056.59 per ounce as of 0046. U.S. gold futures for August delivery increased by 0.3% to $4,062.50.

Oil prices continued their upward trajectory for a fourth consecutive session as the U.S. targeted Iran’s coastal defences and missile installations following the reinstatement of a naval blockade on its ports. In response, Iran warned of potential disruptions to additional regional energy exports, declaring that it was in a “existential war” with America. U.S. producer prices experienced an unanticipated decline in June, marking their most significant drop in 14 months, driven by a reduction in the costs associated with energy products. This development serves as additional evidence that inflation was easing prior to the recent intensification of conflict in the Middle East.

Fed Chairman Kevin Warsh this week expressed his commitment to reducing inflation, yet refrained from providing specifics on the approach, while his colleagues openly shared their perspectives on the economic landscape and interest rates. Fed Governor Lisa Cook stated on Wednesday that she is “prepared to act” if inflation does not soon begin to slow. While inflation is “unquestionably too high,” there are reasons to believe it may have peaked and should soon begin to decline, New York Fed President John Williams stated.

China’s economy grew at its most sluggish rate in over three years during the second quarter. Fury Gold Mines announced on Wednesday the temporary suspension of exploration and drilling activities at its Eau Claire project located in northern Quebec, following the evacuation of all personnel due to a forest fire in the vicinity. In other markets, spot silver declined by 0.3%, trading at $57.61 per ounce. Platinum declined by 0.3% to $1,668.43, while palladium also saw a decrease of 0.3%, settling at $1,310.36.