Gold Holds Strong Ahead of FOMC & Warsh Speech
Gold prices held steady on Wednesday (June 17th), as investors awaited the first Federal Reserve policy decision under new Chairman Kevin Warsh. The market was also still monitoring further details of the US-Iran peace deal, which could influence sentiment toward the precious metal.
Spot gold rose 0.3% to $4,343.77 per ounce, while US gold futures rose 0.2% to $4,361.60. This limited movement suggests market participants have not taken large positions ahead of the Fed's decision and Warsh's press conference.
The Fed's latest interest rate decision, policy statement, and projections will be released at 2:00 p.m. local time, followed by the press conference half an hour later. Investors' primary focus will be on whether the Fed will maintain its neutral tone or signal a more hawkish stance on inflation risks.
Gold briefly touched a nearly six-month low last week after inflation concerns stemming from the Iran conflict raised expectations for a US interest rate hike. Although gold is often viewed as a hedge against inflation, high interest rates remain a source of pressure because it offers no yield.
Prices subsequently recovered after the US and Iran agreed on a peace framework. This agreement has the potential to ease pressure on energy prices and lower inflation expectations, especially if the opening of energy supply lines proceeds as planned.
However, geopolitical risks have not completely disappeared. US President Donald Trump stated that the deal with Iran is not final and left open the possibility of further attacks if he is dissatisfied with its implementation. This statement has kept investors cautious even though inflationary pressures from energy are beginning to ease.
The market's next focus will be on the tone of Warsh's communication, the Fed's interest rate projections, developments in the US-Iran deal, and the direction of oil prices. As long as policy signals remain unclear, gold has the potential to remain limited, with high sensitivity to yields, the US dollar, and geopolitical risks. (arl)
Source: Newsmaker.id
