Gold prices witnessed a modest increase on Wednesday, buoyed by declining Treasury yields and a slight retreat in the dollar, as investors await the U.S. Federal Reserve‘s policy announcement later in the day to gain insight into the future direction of monetary policy.Â
In Dubai, gold rates saw an uptick, with 24-carat gold rising by AED1.75 to AED400.50 and 22-carat gold increasing by AED1.25 to AED371.00. Furthermore, 21-carat gold climbed AED1.25 to AED355.75, while 18-carat gold gained AED1.00, reaching AED305.00.
Spot gold rose by 0.1 percent to $3,328.65 per ounce as of 04:22 GMT (currently trading above $3,329), while U.S. gold futures also climbed 0.1 percent to $3,326.10 (currently trading above $3,384).Â
U.S.dollar bulls pause
The U.S. dollar bulls took a brief respite following their recent sharp rally, which saw the dollar reach a one-month peak on Tuesday, just ahead of the crucial FOMC monetary policy decision later on Wednesday. According to the CME Group’s FedWatch Tool, traders are currently anticipating a 97 percent likelihood that the Federal Reserve will maintain interest rates in the 4.25-4.50 percent range, despite ongoing pressure from U.S. President Donald Trump. As such, the focus will remain on the accompanying monetary policy statement and Fed Chair Jerome Powell’s remarks during the post-meeting press conference. There remains a possibility of a more hawkish tone due to inflationary risks stemming from increased U.S. tariffs. However, investors still expect the Fed to indicate a rate cut in September. Ultimately, the outlook will influence the U.S. dollar and subsequently affect the price of non-yielding gold.
Read more: Dubai 24-carat gold price drops below AED399 as tariff fears diminish, dollar strengthens
Potential price surge ahead
Gold typically performs well in a low interest rate environment. If gold prices exceed $3,350 by the end of this week—given the impending U.S. inflation data and employment reports—it could potentially shift momentum back towards a rise in prices, at least in the short term, according to Wong. Meanwhile, U.S. and Chinese officials agreed on Tuesday to pursue an extension of their 90-day tariff truce, which is set to expire on August 12, following two days of discussions in Stockholm. U.S. officials remarked that the decision ultimately rests with Trump. The International Monetary Fund slightly adjusted its global growth forecasts for 2025 and 2026 upwards on Tuesday, citing stronger-than-anticipated purchases ahead of an increase in U.S. tariffs on August 1 and a decline in the effective U.S. tariff rate from 24.4 percent to 17.3 percent. Spot silver remained steady at $38.21 per ounce, while platinum fell by 0.6 percent to $1,386.73 and palladium increased by 0.5 percent to $1,265.07.
Job openings decline
As the key central bank event approaches, traders will be looking for insights from the U.S. ADP report on private-sector employment amid indications of a slowdown in the labor market. Notably, the Job Openings and Labor Turnover Survey (JOLTS) released by the U.S. Bureau of Labor Statistics on Tuesday indicated that the number of job openings stood at 7.43 million in June, a decrease from May’s downwardly revised figure of 7.71 million and below the expected 7.55 million.
In a separate report, the Conference Board’s Consumer Confidence Index rose to 97.2 in July, up from 95.2 the prior month, suggesting increased optimism among consumers. This improved sentiment could lead to heightened consumer spending and play a crucial role in stimulating economic activity. Hence, investors on Tuesday will also closely monitor the Advanced Q2 GDP print, which could provide momentum for both the dollar and the XAU/USD pair.
