Gold Prices Slip as Dollar Strengthens Ahead of Fed Decision
Spot gold declined 0.7% to $4,049.12 an ounce by 23:50 ET (03:50 GMT), and U.S. gold futures slipped a similar amount, closing at $4,049.10 per ounce. The decline came as the U.S. Dollar Index traded largely unchanged but hovered near a one‑month high, making dollar‑priced bullion more expensive for overseas buyers.
The Federal Reserve’s two‑day policy meeting concludes on Wednesday, and markets broadly expect rates to remain unchanged. However, the CME FedWatch tool shows a 40% probability of a rate hike this week and an 80% probability of a hike in September, indicating heightened expectations of later‑year tightening. Higher rates typically reduce the appeal of non‑yielding bullion, and investors have trimmed exposure ahead of key U.S. data releases, including second‑quarter GDP and the Fed’s preferred inflation gauge due later in the week. Analysts note that gold remains trapped in a broad range as investors await clearer guidance from the central bank.
In related geopolitical news, U.S. President Donald Trump said the United States is having "good talks" with Iran and highlighted a chance of reaching a deal, while noting that military strikes could resume if negotiations fail. The U.S. and Iran have maintained a pause in hostilities, easing fears of supply disruptions and providing some relief to inflation expectations.
Commodity markets saw broader declines: oil prices extended sharp losses in Asian trading, easing energy‑driven inflation concerns. Among other precious metals, silver fell 1.6% to $57.483 per ounce and platinum dipped 0.6% to $1,612.60 per ounce. Benchmark copper futures on the London Metal Exchange declined 0.5% to $13,687.33 a ton, and U.S. copper futures fell 0.5% to $6.364 a pound.