Bullion stabilises as investors await Fed signals
Gold prices traded little changed on Wednesday, finding some stability after suffering their steepest quarterly decline in more than a decade as rising expectations for higher U.S. interest rates weighed heavily on precious metals.
Market participants are now looking ahead to remarks from Federal Reserve Chair Kevin Warsh later in the day, hoping for fresh insight into the outlook for monetary policy and inflation.
The precious metal has faced sustained pressure as investors shifted toward the U.S. dollar amid growing expectations that the Federal Reserve will tighten policy again this year. The dollar has also drawn support from the perception that the United States, as a major energy exporter, is relatively insulated from the economic effects of the Iran conflict.
Spot gold rose 0.4% to $4,023.23 an ounce by 08:08 ET (12:08 GMT), while gold futures were broadly unchanged at $4,036.95 an ounce. Earlier in the session, spot prices briefly slipped below the $4,000 level.
“Gold took another punch to the guts overnight […],” said David Morrison, Senior Market Analyst at Trade Nation, in a research note.
“The rebound in the U.S. dollar after a week-long consolidation didn’t help gold’s cause. And as things stand, it will take something quite big to take the wind out of the sails of the dollar’s rally.”
Rising rate expectations weigh on gold
Gold declined approximately 14% during the June quarter, marking its weakest quarterly performance since 2013.
Although prices initially struggled after the outbreak of the conflict involving the United States, Israel and Iran, much of the selling pressure intensified during June as investors reacted to stronger inflation signals and a more hawkish Federal Reserve.
Minutes from the Fed’s June meeting showed several policymakers supporting at least one interest rate increase before the end of the year, representing a significant shift from expectations earlier in 2026 that the central bank was preparing to begin cutting rates.
Higher oil prices following the outbreak of the conflict—partly driven by the effective closure of the Strait of Hormuz, through which roughly one-fifth of global crude oil and liquefied natural gas supplies pass—also contributed to renewed inflation concerns. Since the United States and Iran reached an interim peace agreement last month, oil prices have retreated to levels seen before the conflict.
Even so, CME FedWatch data indicate that financial markets continue to price in at least one Federal Reserve rate increase this year.
Higher interest rates generally reduce the appeal of gold because the metal does not generate income, increasing the opportunity cost of holding bullion.
Precious metals show mixed performance
Other precious metals also traded mixed after posting substantial quarterly declines.
Spot silver fell 0.5% to $58.2900 an ounce, while spot platinum edged 0.2% higher to $1,556.49 an ounce.
Markets await Warsh’s first public remarks since June meeting
Investors are closely watching Kevin Warsh’s appearance later on Wednesday at the European Central Bank’s annual forum in Sintra, Portugal.
The event will mark the Federal Reserve Chair’s first public comments since presiding over his first policy meeting in June.
While Warsh is not expected to offer explicit forward guidance after calling for reduced communication from the central bank during the June meeting, investors will closely examine his comments for clues on inflation, interest rates and the broader outlook for the U.S. economy.
“[T]wo weeks ago, Mr Warsh made it clear that the Federal Reserve was focused on tackling inflation and driving it back down to the Fed’s 2% target. That looks likely to require a rate hike or two,” Morrison said.
Attention will also turn later in the day to U.S. private payrolls data, which are expected to provide additional insight ahead of Thursday’s closely watched June employment report.