Gold Awaits Fed

 

Gold prices edged lower on Tuesday as the US dollar hovered near a one-month high, while investors remained cautious ahead of the Federal Reserve’s policy announcement and comments from Fed Chair Kevin Warsh for fresh clues on the future path of interest rates.

Spot gold fell 0.7% to $4,048.40 per ounce as of 10:07 WIB, while US Gold Futures declined by a similar margin to $4,049.10 per ounce. Despite the pullback, the precious metal had posted modest gains over the previous two trading sessions.

The stronger US dollar continued to weigh on bullion prices, making gold more expensive for overseas buyers. The US Dollar Index remained close to its highest level in nearly a month as traders adopted a wait-and-see approach ahead of the Fed’s highly anticipated policy decision.

Markets overwhelmingly expect the Federal Reserve to leave interest rates unchanged at the conclusion of its two-day meeting on Wednesday. However, investors have increased bets that policymakers could resume monetary tightening later this year. According to the CME FedWatch Tool, markets are pricing in roughly a 40% chance of a rate hike this week and an 80% probability of another increase in September.

Higher interest rates typically reduce the appeal of non-yielding assets such as gold by increasing the opportunity cost of holding bullion.

Investor sentiment also remained cautious ahead of several key US economic releases scheduled later this week, including second-quarter Gross Domestic Product (GDP) data and the Fed’s preferred inflation gauge. These reports are expected to play a crucial role in shaping expectations for future monetary policy.

Market analysts noted that gold continues to trade within a broad range as investors await clearer guidance from the central bank. Until then, price movements are likely to remain driven by economic data, interest rate expectations, and fluctuations in the US dollar.

On the geopolitical front, market concerns eased after US President Donald Trump said Washington was engaged in “good talks” with Iran, raising hopes for a diplomatic agreement while warning that military action could resume if negotiations fail.

The temporary pause in hostilities between the United States and Iran has eased fears of supply disruptions and reduced inflation concerns linked to geopolitical tensions. Adding to the softer inflation outlook, oil prices extended their sharp decline during Tuesday’s Asian trading session.

Elsewhere in the precious metals market, silver fell 1.8% to $57.387 per ounce, while platinum slipped 0.9% to $1,611.60 per ounce.

Base metals also traded lower. London Metal Exchange benchmark copper futures declined 0.6% to $13,677.33 per metric ton, while US copper futures dropped 0.5% to $6.364 per pound, reflecting cautious sentiment across the broader commodities market ahead of the Fed's policy announcement.

Share:

Read More

Gold Eyes Fed

Gold Prices Edge Higher as Weaker US Dollar Offsets Middle East Uncertainty Ahead of Fed Decision

Gold prices climbed on Monday, supported by a weaker US dollar as investors weighed the temporary easing of tensions in the Middle East while awaiting the US Federal Reserve's monetary policy decision later this week.

Spot gold gained 1.1% to $4,096.36 per ounce as of 09:52 WIB (0252 GMT), while August US Gold Futures rose 0.68% to $4,098.60 per ounce.

The precious metal ended last week nearly 1% higher, despite heightened market volatility driven by geopolitical developments and shifting expectations surrounding US monetary policy.

Weaker US Dollar Boosts Gold Demand

Gold received additional support after the US Dollar Index (DXY) fell 0.3%, making dollar-denominated bullion more attractive for investors holding other currencies.

The rally also followed a sharp decline in crude oil prices after military hostilities between the United States and Iran eased over the weekend.

Following 13 consecutive nights of US strikes on Iranian targets, President Donald Trump halted the bombing campaign late Friday to allow diplomatic efforts to continue. Iran also refrained from launching retaliatory attacks against neighboring countries hosting US military bases during the weekend.

Crude oil prices dropped more than 5% in early Monday trading, reversing part of last week's gains that had been fueled by concerns over potential supply disruptions through the Strait of Hormuz and the Red Sea.

Although lower oil prices could help ease inflationary pressures, investors remain cautious as they assess the broader economic outlook ahead of the Federal Reserve meeting.

Federal Reserve Decision in Focus

Market attention is now firmly centered on the Federal Reserve's policy announcement scheduled for Wednesday.

The US central bank is widely expected to leave interest rates unchanged. However, traders will closely monitor comments from Federal Reserve Chair Kevin Warsh for clues on the timing of potential rate cuts and policymakers' assessment of inflation risks and economic growth.

In addition to the Fed meeting, investors will also keep a close eye on upcoming US economic releases, including inflation and labor market data, which could provide further guidance on the central bank's policy path in the coming months.

Precious Metals and Copper Market Update

Among other precious metals, spot silver advanced 2.1% to $59.39 per ounce, while platinum surged 2.3% to $1,630.83 per ounce.

Meanwhile, London Metal Exchange (LME) copper futures edged up 0.4% to $13,693.58 per metric ton, while US copper futures were little changed at $6.36 per pound.

Share:

Read More

Gold Weekly Rebound

Gold Set for First Weekly Gain in Three Weeks

Gold prices edged lower on Friday but remained on track to post their first weekly gain in three weeks, as escalating geopolitical tensions in the Middle East continued to support safe-haven demand despite growing expectations that the Federal Reserve will keep interest rates higher for longer.

As of 08:35 WIB, XAU/USD slipped 0.2% to $4,042.72 per ounce, while Gold Futures were little changed at $4,044.92. Silver (XAG/USD) declined 0.3% to $57.47 per ounce, while Platinum (XPT/USD) fell 0.5% to $1,589.67 per ounce.

Middle East Tensions Fuel Inflation Concerns Ahead of Fed Meeting

Gold was little changed after falling nearly 2% in the previous session but has still gained around 0.8% this week, putting the precious metal on track for its first weekly advance in three weeks.

Geopolitical risks intensified after Iran-backed Houthi militants in Yemen attacked two Saudi oil tankers in the Red Sea. In response, U.S. President Donald Trump warned that Washington would hold Iran accountable for any future Houthi attacks on commercial shipping and threatened further military action against Tehran.

Market sentiment remained cautious after The New York Times reported that Iran rejected a U.S.-backed ceasefire proposal, dampening hopes for a near-term de-escalation despite ongoing diplomatic efforts.

The renewed geopolitical uncertainty also pushed crude oil prices higher, adding to inflation concerns. Meanwhile, stronger-than-expected U.S. labor market data reinforced expectations that the Federal Reserve may maintain a restrictive monetary policy. Initial jobless claims unexpectedly fell to 187,000, their lowest level in decades, driving the yield on the benchmark 10-year U.S. Treasury note to its highest level since January 2025.

Markets are now pricing in roughly a 34% probability of a 25-basis-point interest rate hike at next week's Federal Reserve meeting, as resilient employment data and rising energy prices continue to strengthen the inflation outlook.

Analysts at Nomura expect the Fed to leave interest rates unchanged. They also believe Fed Chair Kevin Warsh is unlikely to provide meaningful forward guidance, as the July meeting will not include updated economic projections or a revised dot plot.

Share:

Read More