Gold regained momentum during Wednesday's Asian trade, lifted by safe-haven flows as geopolitical risks resurfaced and traders positioned ahead of key United States inflation data, while the U.S. dollar’s recent rebound lost steam.
By 3:35 pm AEST (5:35 am GMT), spot gold had risen $16.06, or 0.5%, to $3,642.06 per ounce, reversing part of Tuesday’s pullback from its all-time high of $3,674.7.
The precious metal drew renewed investor demand after reports of suspected Russian drone incursions into Polish airspace, breaching NATO territory.
While market reaction remained limited, the headlines revived concerns over escalation in Eastern Europe and fuelled gold’s role as a store of value.
The upside was further aided by renewed selling in the U.S. dollar as traders adjusted positions before the release of U.S. producer price index (PPI) inflation data.
Market expectations for Federal Reserve easing remain firmly supportive of bullion. According to the CME Group FedWatch Tool, traders are pricing in a 91.7% chance of a 25-basis-point cut at the Fed’s September meeting and an 8.3% probability of a larger 50-basis-point move.
Speculation is also building that policymakers could deliver more than two cuts this year.
Adding to the policy backdrop, a U.S. federal judge blocked President Donald Trump’s attempt to remove Federal Reserve Board Governor Lisa Cook, a move that reinforced the independence of the central bank.
Gold’s rally also follows Tuesday’s sharp gains after the U.S. Nonfarm Payrolls Benchmark Revision showed nearly one million fewer jobs than previously estimated between April 2024 and March 2025. The revisions heightened concerns over labour market weakness, fuelling bets for aggressive Fed easing.
Meanwhile, geopolitical risks in the Middle East also supported demand. Israeli forces confirmed air strikes in Doha, Qatar, targeting Hamas leadership under “Operation Summit of Fire”. While profit-taking saw gold retreat from highs in the previous session, renewed tension has kept demand elevated.
