Gold prices steadied near a one-month low on Wednesday as demand for bullion was largely quashed by continued uncertainty over the Iran war, while anticipation of a Federal Reserve meeting also weighed.
The yellow metal logged steep losses this week as safe haven buyers largely stuck to the dollar, while higher oil prices, on expectations of a prolonged U.S.-Iran deadlock, also spooked markets.
Spot gold fell 0.1% to $4,593.04 an ounce by 02:09 ET (06:09 GMT), while gold futures fell 0.1% to $4,606.31/oz.
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Other precious metals were mixed but were also nursing steep losses in recent sessions. Spot silver rose 0.7% to $73.6135/oz, while spot platinum fell 0.3% to $1,937.75/oz.
Trump preparing for prolonged Iran blockade- WSJ U.S. President Donald Trump told aides to prepare for a prolonged naval blockade against Iran, the Wall Street Journal reported on Tuesday evening.
The move is aimed at intensifying pressure on Iran’s economy by cutting off its ability to export oil, further pushing Tehran towards a deal.
Reports earlier this week showed Trump largely unhappy with an Iranian proposal to reopen the Strait of Hormuz and end the war, given that the proposal called for the postponement of talks on Iran’s nuclear activities.
A prolonged naval blockade is likely to draw more ire from Iran, which could retaliate by keeping the Strait of Hormuz closed in the near-term. Such a scenario stands to further disrupt oil flows in the Middle East.
Fears of oil-driven inflation, which in turn could elicit more hawkish signals from global central banks, were a major weight on gold prices since late-February. Markets feared that higher rates will increase the opportunity cost of investing in non-yielding assets such as gold, largely overshadowing bullion’s safe haven appeal.
“For gold to regain stronger traction, markets may need to see either a pullback in oil prices or signs that geopolitical tensions are easing enough to revive dovish Fed pricing,” OCBC analysts said in a note.
Fed meeting awaited for more cues Focus was also on the conclusion of the Fed’s two-day meeting later on Wednesday, with the central bank widely expected to leave interest rates unchanged.
Wednesday’s decision comes amid growing bets that the Fed will leave interest rates unchanged for the rest of 2026, especially in the face of heightened inflation stemming from the Iran war.
Beyond the Fed, interest rate decisions at the European Central Bank and the Bank of England are also due this week.
