Gold prices traded little changed on Wednesday after a four-session advance, with easing inflation concerns linked to the U.S.-Iran agreement offsetting investor caution ahead of the Federal Reserve’s latest policy decision.
Spot gold slipped 0.1% to $4,327.56 per ounce, while U.S. gold futures eased 0.2% to $4,347.26 per ounce.
Precious Metal Benefits from Softer Inflation Outlook
Gold has recovered strongly from recent multi-month lows around $4,000 per ounce, supported by shifting expectations for inflation and monetary policy.
A provisional agreement between Washington and Tehran has helped improve market sentiment by reducing fears of supply disruptions in energy markets. The framework includes a continuation of the ceasefire and provisions allowing Iran to resume oil exports while negotiations continue.
The resulting decline in crude prices has eased concerns over a renewed inflation spike and encouraged investors to reassess expectations for future interest-rate policy.
Weak Dollar Provides Additional Support
The precious metal has also drawn support from a softer U.S. dollar.
The U.S. Dollar Index remained close to a 10-day low, making gold more attractive to buyers using other currencies and helping sustain demand following the recent rally.
Lower expectations for tighter monetary policy have further improved the appeal of non-yielding assets such as bullion.
Investors Await Signals from the Fed
Attention is now focused on the Federal Reserve’s policy announcement, the first under Chair Kevin Warsh.
While policymakers are widely expected to leave interest rates unchanged, markets are preparing for updated economic forecasts and a revised “dot plot” outlining future rate expectations.
Investors will be looking for clues on whether Fed officials still anticipate scope for monetary easing later this year.
Any unexpectedly hawkish commentary could strengthen the dollar and lift Treasury yields, creating headwinds for gold.
Central Bank Buying Remains Strong
Longer-term demand for the metal continues to receive support from central banks.
A recent World Gold Council survey found that 45% of reserve managers expect to increase gold holdings over the next year, reflecting its ongoing role as a hedge against uncertainty and a tool for portfolio diversification.
Mixed Performance Across Metals
Elsewhere, silver gained 0.5% to $70.34 per ounce, while platinum fell 1.1% to $1,788.72 per ounce.
Copper prices moved higher, with benchmark London Metal Exchange futures rising 0.3% to $13,833.33 a tonne and U.S. copper futures advancing 1% to $6.54 per pound.
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