Gold Losses Ground After FOMC

Gold futures fell toward $4,880 per ounce on Wednesday as a persistent hawkish hold from the Federal Reserve and elevated Treasury yields countered the safe haven appeal of intensifying Middle Eastern instability. The FOMC maintained the federal funds rate at the 3.5%–3.75% target range for a second consecutive meeting while signaling that only one rate reduction remains likely for 2026. While bullion initially found support from reports of airstrikes on Iran’s South Pars gas field and the killing of intelligence minister Esmaeil Khatib, the central bank’s focus on inflation risks has bolstered the dollar to increase the opportunity cost of holding non yielding assets. Policymakers noted that while job gains have remained low and the labor market shows signs of softening, the uncertain economic implications of the effective closure of the Strait of Hormuz necessitate a restrictive monetary stance.

Gold fell toward the $4,850 per ounce on Wednesday to trade near its lowest level in a month as surprisingly hot producer inflation reinforced expectations for a hawkish Federal Reserve policy hold. A 0.7% surge in February wholesale prices has pushed Treasury yields to 4.2% and bolstered the dollar index toward 99.9 ahead of today’s interest rate decision. While safe haven demand remains underpinned by the escalation of the Middle East conflict following the death of Iranian security chief Ali Larijani and fresh strikes on Gulf energy infrastructure, the rising opportunity cost of holding non yielding assets has capped any meaningful recovery. Investors are now focused on the FOMC dot plot and Chair Powell’s press conference to gauge if persistent inflationary heat will further delay anticipated rate cuts for 2026. Despite the 3% retreat this week, gold maintains a year to date gain of about 16% as markets navigate the fallout from disrupted shipping through the Strait of Hormuz.

Gold decreased to 4960.00 USD/t.oz, the lowest since February 2026. Over the past 4 weeks, Gold lost 0.38%, and in the last 12 months, it increased 63.25%.