Gold prices rose on Wednesday as investors capitalized on the recent dip, following a sharp decline in the previous session. Market sentiment remains cautious as traders await the release of the U.S. Federal Reserve’s latest meeting minutes, along with key economic data that could offer insights into the future of U.S. interest rates.
As of 0853 GMT, spot gold was up 0.6%, trading at $3,320.58 per ounce. In the prior session, gold had dropped below the $3,300 mark, reaching a low of $3,285.19.
U.S. gold futures also gained 0.6%, reaching $3,319.50 per ounce.
Gold Price Rebound Driven by Investor Activity
Jigarl Trivedi, Senior Commodities Analyst at Reliance Securities, attributed the rebound in gold prices to buying activity following the previous session’s steep drop. “The market is in a wait-and-see mode ahead of the release of the Federal Reserve’s meeting minutes, which has led to some position adjustments,” Trivedi said.
Market participants are particularly focused on the Federal Reserve’s latest meeting minutes, set to be published later today, along with the release of the U.S. Personal Consumption Expenditures (PCE) data on Friday. The PCE, a key inflation gauge, is closely monitored by the Fed when making decisions on monetary policy. In addition, several Fed officials are scheduled to speak throughout the week, offering further insights into the central bank’s approach to interest rates.
Fed Minutes and Economic Data Heighten Market Anticipation
Han Tan, Chief Market Analyst at Exinity Group, noted that if the PCE data comes in below expectations, gold prices could see further upside. Such a development could ease concerns over stagflation and set the stage for the Fed to consider additional rate cuts.
“If the Federal Reserve signals a willingness to return to a rate-cutting cycle, gold prices may break through the $3,000 to $3,500 range,” Tan predicted.
In remarks made earlier, John Williams, President of the Federal Reserve Bank of New York, emphasized that when inflation deviates from its target, the central bank must take “relatively strong actions” to address the issue.
The Federal Reserve has maintained its policy rate at 4.25% to 4.50% since December 2024, awaiting further clarity on the economic outlook. At the same time, policymakers have had to navigate market volatility stemming from U.S. President Donald Trump’s inconsistent statements on trade negotiations with global partners.
Modest Gains for Other Precious Metals
Elsewhere in the precious metals market, other commodities saw slight gains. Spot silver rose by 0.1%, reaching $33.34 per ounce. Platinum climbed 0.8% to $1,087.97 per ounce, while palladium saw a modest uptick of 0.1%, trading at $979.57 per ounce.
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