Gold prices continue to trade at high levels as investors wait for the first policy meeting of the Federal Reserve under its new leadership. Market participants are closely watching interest rate signals, which are expected to shape global financial trends.
On Wednesday, gold rose by about 0.3% during early Asian trading. The price briefly climbed above $4,340 per ounce. However, it later gave up some gains. It then stabilized around $4,330 per ounce.
In futures markets, gold contracts for August delivery also increased. Prices moved above $4,360 before easing slightly during later trading sessions.
At the same time, attention remains on possible developments in US–Iran relations. Although no official agreement has been confirmed, reports suggest that the United States may allow limited Iranian oil exports. In return, Iran could commit to easing tensions in the Strait of Hormuz.
These expectations have already affected global oil markets. Oil prices have fallen to their lowest levels in three months. Lower oil prices may reduce inflation pressures. As a result, they can influence central bank policy expectations and interest rate decisions.
Financial analyst Ilya Spivak from Tastylive said that falling oil prices have reduced pressure on central banks to raise interest rates. He added that this shift is helping to support gold prices.
However, Spivak also noted that the impact of weaker oil prices on gold may be fading. Traders are now focusing more on central bank policy direction and future US interest rate decisions.
Later today, at 9:00 PM Erbil time, the Federal Reserve will announce the outcome of its first meeting under Chairman Kevin Warsh. Markets widely expect the Fed to keep interest rates unchanged.
According to market surveys, traders now assign a 59% chance of a rate hike in December. This is lower than previous expectations, which stood at 70%.
In general, higher interest rates tend to limit gold’s upside potential because they increase the attractiveness of interest-bearing assets.
Westpac, a major Australian bank, said in a note to investors that gold’s long-term trend remains positive. It pointed to strong demand in Asia and continued central bank purchases of gold as key supporting factors.
