Gold Dips Ahead of Fed Decision

Gold dipped to around $4,990 per ounce on Wednesday, staying near its lowest level in a month, as investors continued to assess the impact of fluctuating oil prices on inflation ahead of the Federal Reserve’s monetary policy decision. With the Fed widely expected to leave interest rates unchanged later today, markets will closely examine the central bank’s outlook on rising energy prices and a cooling labor market. Other major central banks, including the ECB, BoE, and BoJ, are also expected to keep their policy settings unchanged. Meanwhile, the US and Israel continued overnight strikes, as Iran confirmed that national security chief Ali Larijani had been killed, following earlier Israeli claims he died in an airstrike. Tehran also pressed ahead with attacks on energy infrastructure across the Persian Gulf, while shipping through the Strait of Hormuz remained largely disrupted. Despite the recent weakness, gold is still up about 16% year-to-date.

Gold trimmed its modest early gains on Tuesday, hovering near the flat line around $5,010 per ounce, as traders weighed ongoing geopolitical risks against caution ahead of a series of key monetary policy decisions due this week. The precious metal continues to draw support from sustained safe-haven demand, driven by heightened uncertainty surrounding the ongoing conflict in Iran. Tensions escalated further after Iran launched fresh attacks on the UAE on Tuesday, raising the risk of a broader regional conflict now entering its third week. However, rising energy prices have reignited inflation concerns, prompting investors to scale back expectations for interest rate cuts later this year. Major central banks, including those in the US, Eurozone, UK, and Japan, are widely expected to keep rates unchanged, with market attention focusing on policymakers’ guidance and how they plan to navigate the economic fallout from the escalating conflict.

Gold edged higher to around $5,020 per ounce on Tuesday but remained close to its lowest level in nearly a month, as traders continued to assess the impact of the Middle East conflict on inflation and monetary policy outlook. The US-Israeli conflict with Iran is now in its third week, with Iran intensifying strikes on energy infrastructure across the region, while President Trump has warned of direct attack on Iran’s oil facilities on Kharg Island. The conflict has kept energy prices elevated, fueling concerns that sustained increases could further stoke inflation and reinforce a hawkish stance among central banks. The Federal Reserve is widely expected to hold rates steady this week, while other major central banks, including the ECB, BOE, and BOJ are also anticipated to maintain their current policy settings. Meanwhile, President Trump reiterated his call for help from other nations to secure the Strait of Hormuz, although several countries have declined to participate.