Gold hardly changes as investors await Fed decision

Bengaluru — Gold prices were flat in Asia trade on Wednesday as investors held back from placing large bets ahead of the US Federal Reserve’s policy decision, while also keeping a close watch on the developments surrounding the Israel-Iran conflict.

Spot gold was flat at $3,388.04/oz by 3.41am GMT. US gold futures were mostly unchanged at $3,406.50.

“Gold fluctuated as investors tracked the escalation of risk in the Middle East. Tepid US reports on retail sales, housing and industrial output bolstered the case for the Fed to cut rates later this year,” analysts at ANZ said in a note.

Iran and Israel launched new missile strikes at each other on Wednesday as the air war between the two longtime enemies entered a sixth day despite a call from US President Donald Trump for Iran’s unconditional surrender.

The US was deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes, three US officials told Reuters.

Data on Tuesday showed US retail sales dropped more than expected in May, weighed down by a decline in motor vehicle purchases as a rush to beat potential tariff-related price hikes ebbed.

Meanwhile, the US central bank is widely expected to leave interest rates unchanged at the end of its policy meeting later in the day.

Focus will also be on Fed’s updated projections for the economy and the benchmark interest rate.

“We maintain our forecast that structurally strong central bank buying and the boost to ETF holdings from Fed cuts will raise the gold price to $3,700/oz by end-2025 and $4,000 by mid-2026,” Goldman Sachs said in a note.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.43% to 945.94 tonnes on Tuesday.

Elsewhere, spot silver eased 0.1% to $37.22/oz, platinum rose 0.3% to $1,266.04, while palladium gained 0.3% to $1,054.63. 

Reuters