Gold Holds Near Record As Dollar Sinks Before Fed Rate Decision

Bullion traded less than $10 below its fresh record of $3,703.07 an ounce reached on Tuesday. It’s also been buoyed by a softer US dollar, with one gauge hovering around levels last seen in March 2022. A weaker greenback makes gold cheaper for other currency holders.

Traders are squarely focused on the outcome of the Fed’s rate-setting meeting, where they see a quarter-point cut this week as a certainty. A solid US retail sales reading on Tuesday did little to move the bets. Lower rates are positive for the non-interest bearing precious metal.

Gold has rallied more than 40% this year on geopolitical uncertainties, concerns about potential negative impacts of US tariffs on the global economy, as well as buying from central banks — especially those from emerging markets. Investors and analysts widely expect more upside for the rally, with Goldman Sachs Group Inc. forecasting prices could rise to near $5,000 an ounce.

US President Donald Trump’s attacks on the Fed’s independence is adding to momentum for gold. His legal battle with Governor Lisa Cook highlights a desire to bend US rates and the dollar to his will. He has also successfully brought his economic adviser Stephen Miran to the Fed to fill a temporary term.

Gold edged 0.1% higher to $3,694.24 an ounce as of 8:20 a.m. Singapore time. The Bloomberg Dollar Spot Index dipped after Tuesday’s 0.5% fall. Silver steadied at just below the highest in 14 years. Palladium rose, while platinum was flat.

Source: Bloomberg Europe