Gold prices tick higher as the USD softens ahead of the Fed decision
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Gold heads toward $3,400 as the US Dollar turns cautious ahead of the Fed. Fed policy projections may outweigh geopolitical concerns if officials signal a ‘higher-for-longer’ stance. Ongoing tensions between Israel and Iran continue to support safe-haven demand, lifting XAU/USD. Gold (XAU/USD) is holding steady near $3,392 on Wednesday, supported by persistent geopolitical tensions and investor caution ahead of the Federal Reserve’s (Fed) policy decision. At the time of writing, XAU/USD is trading just below the $3,400 level, with price action largely rangebound as markets await fresh guidance from the Federal Reserve. Economic figures released earlier in the session point to a moderation in US growth momentum. May housing starts declined by 9.8% to 1.256 million, falling short of expectations, while initial jobless claims registered at 245,000. Continuing claims stood at 1.945 million, indicating a gradual cooling in labor market conditions. These data points collectively reinforce the argument for a cautious policy approach from the Fed. Traders are now focused on the Fed’s rate outlook, updated economic projections, and Powell’s tone. According to the CME FedWatch Tool, analysts expect the Fed to keep interest rates steady, remaining in the 4.25%-4.50% range during the next two meetings, with a 58% chance of a rate cut in September. The Summary of Economic Projections (SEP) and updated “dot plot” will reveal how policymakers view inflation, growth, and the likely rate path for the rest of the year. Investors will closely monitor any changes in inflation forecasts and interest rate expectations, as these will shape the outlook for potential rate cuts. Powell’s tone during the press conference will be key, especially his comments on recent data, global risks, and whether current policy remains appropriate. Dovish signals could weigh on the US Dollar and support Gold, while a hawkish tone may strengthen the Dollar and…
Filed under: News - @ June 18, 2025 7:28 pm