Gold Steady Ahead of Fed Decision

Gold prices rebounded to the $4,100 per ounce mark on Wednesday from the nine-month low of $3,975 from the middle of July after the Federal Reserve maintained its interest rates steady. The decision was consistent with what only a portion of the market was positioned for, with three members of the FOMC dissenting to a rate hike. The hold brought some relief to bullion investors, as higher interest rates reduce demand for assets that bear no yield. In the meantime, demand for safe-haven assets was supported by a new wave of strikes in the Middle East. Iran attacked US forces across the Persian Gulf and energy infrastructure in Saudi Arabia. Elsewhere, the Bank of England and the Bank of Japan are also expected to keep rates unchanged this week while maintaining a cautious stance on inflation.

Gold traded around $4,020 an ounce on Wednesday, little changed from the previous session and hovering near its lowest level since November 2025, as investors awaited the Federal Reserve's policy decision. While the Fed is widely expected to leave interest rates unchanged, markets are pricing in roughly a 40% chance of a 25-basis-point hike today and an 80% probability of an increase in September. Elsewhere, the Bank of England and the Bank of Japan are also expected to keep rates unchanged this week while maintaining a cautious stance on inflation. Meanwhile, Commerzbank lowered its year-end gold price forecast to $4,500 per ounce and expects silver to reach $67 per ounce. On the geopolitical front, Tehran reportedly rejected Oman's proposal for joint regional management of the Strait of Hormuz, dampening hopes for easing tensions. Oil prices also rose following joint US-Saudi strikes in Iraq.

Gold traded around $4,020 an ounce on Wednesday, holding the previous session’s decline as oil prices rebounded following renewed hostilities in the Middle East, reviving geopolitical tensions and keeping investors focused on inflationary pressures and the interest rate outlook. The US military said it had successfully intercepted what it described as a surprise Iranian attack targeting US troops stationed across the Middle East. Investors also awaited the Federal Reserve’s policy decision, where it is expected to leave interest rates unchanged. However, markets continue to price in about a one-third chance of a rate hike, reflecting an unusually high level of uncertainty this close to a policy announcement despite repeated calls from President Donald Trump for lower interest rates. Traders also assign roughly an 80% probability to a rate increase in September, reinforcing expectations that borrowing costs could remain elevated.