Gold prices held firm during Wednesday’s trading after gains that extended for four consecutive sessions, as part of the inflation concerns linked to energy prices eased following the temporary agreement between the United States and Iran. Markets are now waiting for the outcome of the Federal Reserve meeting later in the day.
Spot gold traded near $4,327.56 per ounce after a slight decline of 0.1%, while U.S. gold futures fell 0.2% to $4,347.26 per ounce. This stability came after a clear recovery in the precious metal from multi month lows near the $4,000 per ounce area.
Gold received support from improved investor appetite for safe haven assets, alongside optimism surrounding the U.S. Iran agreement, which aims to calm tensions in the Middle East. The agreement includes allowing Iran to resume oil exports, along with extending the ceasefire while negotiations continue. This placed strong pressure on crude prices and reduced the risk of a new inflation wave driven by energy.
Lower energy prices pushed markets to scale back bets on tighter monetary policy, which usually supports gold as a non yielding asset. The yellow metal also benefited from weakness in the U.S. dollar, with the dollar index remaining close to its lowest level in ten days.
Attention is now focused on the first monetary policy decision from the Federal Reserve under Kevin Warsh. Although expectations point to interest rates remaining unchanged, investors will closely monitor the updated economic projections and the dot plot for clearer signals about the interest rate path in the coming period.
Market sensitivity remains high toward any signal related to the possibility of rate cuts later this year. If the Federal Reserve delivers a more hawkish tone, this could support Treasury yields and the dollar, which may limit the recent gains in gold.
On the other hand, the main supportive factors for gold remain in place, especially with continued interest from central banks in increasing their holdings of the precious metal. A recent World Gold Council survey showed that 45% of central bank reserve managers expect to increase their gold allocations over the next year, reflecting its continued role as a tool for reserve diversification and a hedge against geopolitical risks.
Among other metals, silver rose 0.5% to $70.34 per ounce, while platinum fell 1.1% to $1,788.72 per ounce. Benchmark copper futures on the London Metal Exchange also climbed 0.3% to $13,833.33 per ton, while U.S. copper futures rose 1% to $6.54 per pound.
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