Gold Holds Steady as Markets Await Fed Decision; Middle East Conflict Supports Demand
Gold prices remained flat in Asian trading on Wednesday, with investors cautious ahead of the Federal Reserve’s interest rate announcement later in the day. Meanwhile, heightened geopolitical tensions in the Middle East—particularly between Israel and Iran—helped sustain safe-haven demand, especially amid reports of possible U.S. military involvement.
Earlier this week, gold had given up much of its recent gains on news that Iran was open to a ceasefire. However, renewed military action and sharp rhetoric from President Donald Trump, including calls for Iran’s “unconditional surrender,” revived investor caution and risk aversion.
By 01:56 ET (05:56 GMT), spot gold was unchanged at $3,388.25 an ounce, while August gold futures were also steady at $3,405.95 an ounce.
Middle East Escalation and Weak U.S. Data Support Gold
The geopolitical outlook worsened as Israel and Iran entered a sixth day of airstrikes. The Wall Street Journal reported that Trump is weighing U.S. military strikes, including on Iran’s nuclear facilities. Meanwhile, Reuters noted the U.S. is sending more fighter jets to the region and extending the deployment of existing forces—a move the Pentagon called defensive but which has sparked concerns about potential U.S. entry into the conflict.
At the same time, soft U.S. economic data reinforced expectations for a future interest rate cut. May retail sales fell 0.9%, raising investor anticipation of a more dovish Fed stance. While the Fed is widely expected to leave rates unchanged at today’s meeting, attention will focus on its revised economic projections.
As the market awaits the Fed’s next move, the combination of geopolitical uncertainty and weak macroeconomic data is expected to keep gold prices supported.
Broader Metal Markets Rise on Weaker Dollar
Other metals also gained, boosted by a softer U.S. dollar, which makes commodities more attractive to overseas buyers. The U.S. Dollar Index fell 0.2% in Asian trading on Wednesday.
Silver futures rose 0.6% to $37.365 per ounce, and platinum futures climbed 0.5% to $1,269.90 per ounce.
Copper was also higher, with benchmark contracts on the London Metal Exchange up 0.3% to $9,703.75 per ton. U.S. copper futures advanced 0.9% to $4.83923 per pound.
