Gold prices edged lower in Asian trade on Wednesday, pulling back from the US$3,400 level as investors awaited signals from the United States Federal Reserve.
At 3:40 pm AEST (5:40 am GMT), spot gold fell $3.19, or 0.1%, to US$3,385.45 per ounce.
Markets remained on edge after U.S. President Donald Trump demanded Iran’s “unconditional surrender” and convened an emergency National Security Council meeting late Tuesday.
However, the absence of a concrete U.S. escalation appears to have soothed short-term fears, allowing broader sentiment to stabilise.
Gold, typically seen as a safe-haven asset, held firm amid Tuesday’s risk-off flows and rising geopolitical risks, supported by a softer U.S. dollar.
While mixed U.S. retail sales data failed to shift the dollar significantly, the broader focus remained fixed on geopolitical headlines and the Federal Reserve's next move.
Attention is now squarely on the Fed’s monetary policy announcement later Wednesday, with markets widely expecting no change to the current 4.25%–4.50% target range.
Instead, investors are keenly watching the release of updated economic forecasts, particularly the “dot plot” showing policymakers’ interest rate expectations, and Chair Jerome Powell’s press conference.
The CME Group FedWatch Tool currently forecasts two rate cuts of 25 basis points each in the latter half of 2025, likely beginning in September.
