(Bloomberg) -- Gold recovered some ground after sliding nearly 4% on Wednesday, with dip-buyers helping the metal to withstand spiking oil prices and inflationary risks from the war in the Middle East.

Bullion rose as much as 1%, reversing some losses sustained over six straight days of decline — the longest losing streak since late 2024. The Federal Reserve held interest rates steady at its latest meeting and projected just one cut this year, with Chair Jerome Powell saying a reduction would require progress in slowing inflation. The conflict makes developments for the US economy “uncertain,” Fed officials said in a statement.

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Oil advanced on Thursday after Iran and Israel traded strikes on some of the most important energy facilities in the Persian Gulf region. Nearly three weeks into the war, soaring crude and gas prices are raising inflationary risks, which make rate cuts by the Fed and other central banks less likely. This is a headwind for gold, which doesn’t pay interest. A stronger dollar has also weighed on commodities priced in the US currency.

“Dollar strength and broader tightening pressures across developed-market central banks present an uncertain near-term pathway for gold,” said Nicholas Frappell, global head of institutional markets at ABC Refinery Australia Pty. “But if inflation rises faster than policy rates, falling real rates may help gold in the medium term.”

Bullion is still up around 12% so far this year, though upward momentum has stalled in recent weeks as prospects for a near-term rate cut have faded and some investors sold the metal to meet margin calls elsewhere in their portfolios. Bullion hit an all-time high above $5,595 an ounce in late January; from the beginning of the war on Feb. 28 to Wednesday’s close, it fell nearly 9%.

“Gold has entered a consolidation period,” Christopher Wood, global head of equity strategy at Jefferies, said in an interview with Bloomberg TV. “The signal that gold has peaked for now is that it did not make a new high on the outbreak of this conflict,” he said, adding that he expected bullion to trade in a range between $4,500 and $5,500 an ounce.

Meanwhile, after the latest Fed meeting on Wednesday, Powell also made rare statements about his future at the US central bank in the wake of an investigation by the Department of Justice. He said he had no intention of resigning as a governor until the probe is complete.

If a successor is not confirmed before his term as chair ends in May, Powell said he would serve as chair pro tempore — a temporary designation previously conferred by the Fed when the role of chair was vacant. The DOJ investigation has raised concerns about political intervention in the Fed, eroding trust in US assets and supporting gold.

Spot gold rose 0.6% to $4,849.10 an ounce at 12:45 p.m. in Singapore. Silver edged up 0.2% to $75.55. Platinum and palladium both advanced, while the Bloomberg Dollar Spot Index was flat after gaining 0.5% in the previous session.

--With assistance from Haslinda Amin.

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