Gold Drops on US Blockade of Hormuz

Gold fell toward $4,000 an ounce on Thursday, giving back recent gains after the Federal Reserve kept interest rates unchanged as widely anticipated but provided limited guidance on its next policy move. Two officials also dissented in favor of a 25-basis-point rate hike, strengthening market expectations for a potential increase in December amid persistent energy-driven inflation. Meanwhile, Fed Chair Kevin Warsh indicated that the central bank could reduce the number of interest-rate decisions from eight to six annually, a proposal that could add to policy uncertainty. Investors are now awaiting the US PCE price index, the Fed’s preferred inflation measure, for further insight into the monetary policy outlook. Elsewhere, markets continue to assess renewed diplomatic efforts to prevent further escalation of the Middle East conflict. However, elevated oil prices remain a concern, sustaining inflationary pressures and expectations for higher interest rates, which could weigh on gold.

Gold prices fell toward $4,030 an ounce on Wednesday, hovering near three-month lows as investors digested the Federal Reserve’s decision to leave interest rates unchanged. A surge in oil prices further fueled inflation concerns, adding pressure to the precious metal. The FOMC voted 10–2 to maintain rates, reaffirming its commitment to bringing inflation under control without providing a clear signal on whether another hike could come in December. Meanwhile, oil prices climbed after an attack on a refinery in Saudi Arabia heightened concerns over potential supply disruptions, while Axios reported that the US and Israel could launch large-scale strikes on Iran unless a last-minute deal is reached. According to the CME FedWatch Tool, markets widely expect the Federal Reserve to raise interest rates for a second time this year in December.

Gold fell below $4,050 an ounce on Wednesday after rising for two straight sessions, as investors cautiously awaited the US Federal Reserve’s upcoming policy decision and assessed geopolitical developments in the Middle East. The Fed is widely expected to keep interest rates unchanged, although traders will look for clues regarding a possible rate hike in December. Meanwhile, the Reserve Bank of New Zealand kept its policy rate steady despite market expectations for another increase, signaling a cautious stance toward further monetary tightening. On the geopolitical front, oil prices remained volatile amid a closely contested Israeli election that could influence the course of the Middle East conflict, while markets grappled with the prospect of fresh US strikes on Iran. Gold has faced sustained pressure this year as regional tensions fueled inflation concerns and strengthened expectations for higher interest rates, reducing the appeal of the non-yielding precious metal.