Gold extends gains for fifth straight session ahead of Fed decision
Gold prices rose for a fifth consecutive session on Wednesday as easing concerns over further U.S. interest rate hikes supported demand for the precious metal, while investors awaited the outcome of the Federal Reserve’s policy meeting and fresh signals from new Fed Chair Kevin Warsh.
Spot gold climbed 0.3% to $4,341.12 per ounce by 0230 GMT, remaining close to the one-week high reached earlier this week. U.S. gold futures for August delivery also gained 0.2% to $4,361.10 per ounce.
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Market sentiment was influenced by growing optimism surrounding a potential interim peace agreement between the United States and Iran. U.S. President Donald Trump said the proposed deal would prevent Tehran from developing nuclear weapons, while a U.S. official indicated that Iran could resume oil exports once the agreement is signed.
Expectations of increased Iranian oil supplies pushed crude prices towards a three-month low, easing concerns over inflation and reducing pressure for additional interest rate hikes.
“The decline in oil prices has lowered upward pressure on interest rates and softened expectations for further rate increases,” said Ilya Spivak, head of global macro at Tastylive. He added that investors are now focused on the Federal Reserve’s policy announcement.
The Fed is widely expected to keep interest rates unchanged at the conclusion of its meeting later in the day. Investors will closely monitor comments from Fed Chair Kevin Warsh for clues on the future policy outlook.
According to Spivak, markets remain uncertain about how Warsh will balance his traditionally hawkish stance with persistent inflation concerns and pressure from the White House for a more accommodative monetary policy.
Higher interest rates typically reduce the appeal of non-yielding assets such as gold.
Despite near-term uncertainty, analysts at Westpac said the long-term outlook for gold remains supported by strong demand from Asian markets and continued purchases by central banks seeking protection against geopolitical and policy risks.
Other precious metals also recorded gains. Spot silver rose 0.3% to $70.38 per ounce, platinum increased 0.5% to $1,812.80, while palladium advanced 0.3% to $1,355.65 per ounce.
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