Gold Rises on Fed Rate Cut Bets

Gold slipped to around $4,960 per ounce on Thursday, remaining choppy after retreating from late-January record levels as markets continued to assess the latest FOMC minutes. The January meeting notes showed Federal Reserve officials were split, with some favoring a pause in further rate cuts for now, while easing could resume later in the year if inflation improves. Others raised the possibility of rate hikes and pushed for a post-meeting statement reflecting a two-sided outlook on future rates. As a result, traders pared expectations for multiple cuts. Attention now turns to key GDP and PCE data due later this week. Short-term demand for precious metals also eased with China’s Lunar New Year, as liquidity thinned while investors remained largely absent. Meanwhile, geopolitical risks around Iran resurfaced, with reports suggesting any US military action could unfold as a weeks-long campaign after inconclusive talks.

Gold traded above $4,990 per ounce on Wednesday, extending gains as investors digested the latest FOMC minutes and recalibrated expectations for US monetary policy. The FOMC minutes revealed a split between participants who would consider cuts if disinflation proceeds and others who favoured holding or tightening if inflation proved persistent. Fed Governor Michael Barr leaned toward keeping rates on hold for some time and Chicago Fed President Austan Goolsbee said cuts could be possible later if the data allow. Although the Fed left its benchmark rate unchanged at 3.5%–3.75% and signaled that progress toward the 2% target could be slower and more uneven, markets continue to price a data-dependent path that leaves room for easing later this year. That ambiguity has sustained gold’s appeal as a hedge against policy missteps and macro uncertainty, even as improved risk sentiment in equities and ongoing geopolitical negotiations temper the urgency of safe-haven flows.

Gold rose to around $4,930 per ounce on Wednesday, recouping some losses from a two-day decline, likely due to dip buying as markets reassessed the Federal Reserve’s monetary policy direction. Federal Reserve Governor Michael Barr said rates should remain on hold “for some time” until inflation shows progress toward the 2% target, while Chicago Fed President Austan Goolsbee suggested additional cuts may be possible later this year if that trend continues. Investors are now watching further Fed remarks, FOMC minutes, and key GDP and PCE data due later this week for more guidance. Meanwhile, short-term demand for precious metals eased as China’s Lunar New Year holiday began, with lower liquidity expected while Chinese investors are off for most of the week. Geopolitical developments also weighed on the safe-haven metal, as reports highlighted progress in US–Iran talks and ongoing negotiations between Russia and Ukraine.