Gold steady as Fed Decision looms and geopolitical risk persists

18 June 2025

Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

Gold traded within a narrow range on Wednesday as investors adopted a cautious stance ahead of the Federal Reserve’s policy announcement. While recent US macro data, including a 0.9% contraction in May retail sales and a 0.2% drop in industrial production, reinforced the case for monetary easing, market participants could remain cautious before hearing updated guidance from Chair Powell and the new dot plot.

Persistent geopolitical tensions continue to underpin safe-haven demand. The Iran-Israel conflict entered its sixth day, marked by renewed aerial exchanges and growing concerns that the United States could become directly involved. Meanwhile, in Eastern Europe, intensified drone and missile strikes added to the global sense of uncertainty.

Should the conflict in the Middle East escalate further, gold could test and potentially break above the USD 3,500 level, paving the way for higher volumes and upside extensions toward the USD 4,000 mark.

Investor interest remains resilient. Gold-backed ETFs recorded another week of inflows, while a record 95% of central banks surveyed by the World Gold Council expect global gold reserves to rise over the next year, highlighting the metal’s growing appeal amid macro and geopolitical uncertainty.

 

Zaid Barem / ymm