Markets analysis on
Gold firmed slightly early on Wednesday after it slid towards a multi-week low. Slightly softer U.S. and Japanese yields limited the pressure on the metal. A retreat of oil prices from their peak also helped ease inflation concerns to some extent, further supporting the yellow metal. European yields remained elevated, capping a stronger move.
Attention remains on the U.S. Federal Reserve policy decision. Markets still price in about a 92% chance of a 25-basis-point interest rate hike later today, which could weigh on prices if it materialises. Supply-risk fears stemming from persistent Middle Eastern tensions continue to keep inflation concerns in the background. More possible rate increases by major central banks could push gold prices lower.
Looking ahead, the Fed decision and press conference will influence gold’s direction. A hawkish vote and messaging could lift yields again and pressure gold. Softer communication may ease the tightening of bets and help gold extend its rebound. Traders are also watching oil prices and developments in the Middle East as they remain near-term risks.
Zaid Barem / ymm
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