Gold prices held firm during Wednesday’s Asian trading session as investors adopted a cautious approach ahead of the Federal Reserve’s anticipated announcement on interest rates. The metal’s status as a safe-haven asset gained strength amid escalating conflict between Israel and Iran, compounded by reports of possible direct U.S. military action in the region.
Earlier this week, gold had given back much of its recent rally after news suggested Iran might pursue a ceasefire. However, renewed airstrikes and strong warnings from U.S. President Donald Trump have reignited risk-off sentiment.
Spot gold remained stable around $3,388.25 per ounce, with August futures steady near $3,405.95 as of early Wednesday (01:56 ET / 05:56 GMT).
Conflict and Economic Data Boost Gold’s Appeal
The Middle East tensions intensified as aerial clashes between Israel and Iran extended into their sixth day. The Wall Street Journal reported that President Trump is considering targeted military strikes against Iran’s nuclear command centers, demanding an “unconditional surrender” from Tehran.
Reuters also highlighted an increased presence of U.S. fighter jets and extended deployment of warplanes in the area. Although described as defensive measures by the Pentagon, these developments have fueled concerns about potential U.S. military involvement.
At the same time, weaker-than-expected U.S. retail sales data for May—a 0.9% decline—have bolstered expectations of a possible Federal Reserve rate cut later in the year. The Fed’s two-day policy meeting ends Wednesday, with markets largely expecting no immediate change in interest rates but closely watching for updated economic forecasts.
Given ongoing geopolitical uncertainty and soft U.S. economic indicators, gold is likely to maintain its support level in the near term.
Other Metals Benefit from a Weaker Dollar
Alongside gold, other precious metals saw price gains, aided by a softer U.S. dollar which improves affordability for foreign buyers. The Dollar Index declined 0.2% during Asian trading.
Silver futures rose 0.6% to $37.37 per ounce, platinum futures increased 0.5% to $1,269.90 per ounce, and copper futures advanced as well. London Metal Exchange copper gained 0.3% to $9,703.75 per ton, while U.S. copper futures climbed 0.9% to $4.839 per pound.