Gold prices eased in early Asian trading on Wednesday as investors adopted a cautious stance ahead of the U.S. Federal Reserve’s interest rate decision and accompanying policy guidance later in the day.
Spot gold last traded down 0.4% at $3,673.38 per ounce by 02:40 ET (06:40 GMT), following a record high of $3,702.95 reached on Tuesday. December U.S. gold futures also dipped 0.4% to $3,710.77 per ounce.
Fed expected to trim rates
The market is largely anticipating a 25 basis point reduction in the federal funds rate, bringing it to a target range of 4.00% to 4.25%. Traders have already priced in the move, with focus now shifting to the updated “dot plot” of policymakers’ rate forecasts and comments from Fed Chair Jerome Powell at the post-meeting press conference. Investors are looking for clues on the pace and magnitude of potential additional cuts in 2026.
Lower interest rates typically support gold by reducing its opportunity cost, weakening the U.S. dollar, and enhancing its role as an inflation hedge and safe-haven asset.
“Continued concerns over the Fed’s independence will also remain the focus for the global market looking ahead,” ING analysts commented. The U.S. Dollar Index hovered near 11-week lows, providing additional backing for bullion.
Gold has climbed over 40% so far this year amid factors such as Trump’s trade policies, geopolitical tensions in the Middle East and Ukraine, and central bank purchases, analysts noted.
Other metals mostly weaker
Other precious and base metals also saw declines as traders adjusted positions ahead of the Fed announcement. Silver futures dropped 1.5% to $42.26 per ounce, while platinum slipped 0.3% to $1,400.60 per ounce. Copper futures eased as well, with London Metal Exchange copper down 0.5% at $10,084.20 per ton and U.S. copper falling 0.7% to $4.67 per pound.
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