June 18 (Reuters) - Gold inched up on Thursday as support from lower oil prices following the U.S.-Iran ceasefire deal countered pressure from a stronger dollar and hawkish Federal Reserve rhetoric.
Spot gold was up 0.2% at $4,264.67 per ounce at 0913 GMT after falling 1.7% on Wednesday. U.S. gold futures fell 2.2% to $4,284.00.
Oil prices fell after the U.S. and Iran signed an interim agreement that would end their conflict, reopen the Strait of Hormuz and waive U.S. sanctions on Tehran's oil, which boosted the oil supply outlook.
Gold is rebounding, with bulls opting to squeeze more gains out of the U.S.-Iran interim peace deal, but upside remains capped by market expectations for at least one Fed rate hike by the end of the year, said Han Tan, chief market analyst at Bybit.
"The hawkish Fed leaves spot gold with a greater bias of dipping back into sub-$4,000 waters rather than reclaiming the $5,000 handle in the second half of 2026," Tan added.
The Fed held interest rates steady on Wednesday, but policymakers expect a hike in borrowing costs later this year amid growing concerns about inflation lodged above the U.S. central bank's 2% target. Fed Chair Kevin Warsh said at the press conference that he was launching a series of task forces to examine central bank operations more broadly.
According to the CME FedWatch Tool, markets are now pricing in about an 84% probability of a U.S. rate hike in December.
Gold typically becomes less attractive in a high-interest-rate environment because it offers no yield.
Adding pressure on prices, the U.S. dollar index (.DXY), firmed 0.5%. A stronger greenback makes dollar-denominated metals more expensive for holders of other currencies.
ANZ said in a note that "investment demand (for gold) is weak, with exchange-traded funds outflows and lighter positioning, but physical demand, especially from China, and central bank buying are underpinning the market."
Among other metals, spot silver rose 0.2% to $68.10 per ounce, platinum fell 1.2% to $1,715.60 and palladium fell 1.9% to $1,288.07.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich and Thomas Derpinghaus
