Gold prices experienced a modest increase on Wednesday, following a rise of approximately 1% in the prior session. Investors are closely monitoring the Federal Reserve’s policy decision scheduled for later in the day, with expectations that the central bank will maintain the current interest rates. Spot gold increased by 0.1% to $4,061.86 per ounce at 0036, following a rise of over 1% and reaching a session high of $4,065.55 on Tuesday. US gold futures for December delivery stabilised at $4,075.60. Markets are poised for the Federal Reserve’s policy decision scheduled for 1800, coinciding with the release of the Personal Consumption Expenditures data on Thursday.
This metric is a critical indicator monitored by the central bank in its pursuit of a 2% inflation target. Market participants predominantly anticipate that the central bank will maintain the current interest rates during today’s meeting. However, there is a significant expectation, approximately 84%, for an increase in rates come December, as indicated by the CME’s FedWatch Tool. Elevated interest rates amplify the opportunity cost associated with maintaining non-yielding bullion. High inflation is expected to endure in the global economy well into the next year, as indicated by a survey of hundreds of economists.
There is a growing concern that price pressures may become entrenched, extending beyond the rising energy costs attributed to the conflict in the Middle East. On the geopolitical front, Yemen’s Iran-aligned Houthis announced on Tuesday that they had targeted Saudi Arabia’s Ras Tanura oil refinery, the largest in the kingdom, with a ballistic missile. Analysts and traders have revised their price forecasts for platinum and palladium for 2026 downwards for the third consecutive quarter, reflecting a cooling demand and a deteriorating outlook for the auto sector. Nevertheless, a rebound for both metals is anticipated in 2027, according to a survey.
In other developments, Japan’s core consumer price index, excluding temporary factors, increased in September at the quickest annual rate in three years, according to data released on Tuesday. This indicates a widening of price pressures, reinforcing the argument for additional interest rate increases. Spot silver increased by 0.1% to $54.38 per ounce, while platinum decreased by 0.2% to $1,537.58, and palladium saw a rise of 0.5% to $1,031.42.
