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Gold prices edged lower on Wednesday, as investors awaited the US Federal Reserve’s latest interest rate decision, due to be announced later in the day.
Gold futures (GC=F) dipped 0.2%% to $4,229.30 per ounce at the time of writing on Friday morning, while spot gold declined by the same margin to $4,199.27 an ounce.
The Fed is widely expected to announce a 25-basis-point interest rate cut on Wednesday, which would mark its third reduction in a row and would take its rate range to 3.5% to 3.75%. Investors will also be listening closely to comments made by Fed chair Jerome Powell in his post-meeting press conference for any clues as to the central bank’s outlook for the year ahead.
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In a note on Wednesday morning, Deutsche Bank (DBK.DE) analysts said: “Beyond the immediate policy decision, our US economists also expect there to be dissents in both a hawkish and dovish direction.
“So to forge a consensus behind a rate cut today, they anticipate the statement and press conference will signal that the hurdle is relatively high for another cut in early 2026.
“Remember as well that we’ll also get the latest summary of economic projections, containing the dot plot for where officials expect rates to move in the years ahead.
“Our economists think the median dots will stay unchanged, consistent with one further 25bp cut in each of 2026 and 2027.”
Gold prices have climbed as markets bets have risen that the Fed will cut rates again, as lower rates tend to boost the appeal of the precious metal, as a non-yielding asset.
The pound crept higher against the dollar (GBPUSD=X) on Wednesday morning, trading at $1.3310 at the time of writing, ahead of the Fed’s rate decision.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six currencies, dipped 0.1% to 99.08 at the time of writing.
Chris Turner, global head of markets and regional head of research for UK & CEE at ING, said that Powell’s press conference after the Fed’s October meeting “sent the dollar sharply higher”.
“Presumably, those risks remain today as he discusses dissent in the decision and the fact that three back-to-back rate cuts have taken the policy rate much closer to neutral,” he said. “Clearly, the pricing of a second rate cut in 2026 is at risk today and comes during a week when investors are hawkishly reassessing global central bank policy.”
Meanwhile, the pound was little changed against the euro (GBPEUR=X) on Wednesday morning, trading at €1.1431 at the time of writing.
Oil prices rose slightly on Wednesday morning, as investors kept an eye on the Fed’s rate decision and developments around Russia-Ukraine peace talks.
Brent crude (BZ=F) futures advanced 0.2% to $61.96 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) climbed 0.3% to $58.41 a barrel.
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ING’s head of commodities strategy Warren Patterson and commodities strategist Ewa Manthey, said: “The oil market is moving deeper into the expected oil glut. Expect additional price pressure as we move into 2026, as discussed in our recently published outlook. However, Russian oil supply remains a risk.”
“While Russian seaborne export volumes are holding up well, these barrels are struggling to find buyers,” they said. “So, we are seeing increasing volumes of Russian oil at sea.”
More broadly, the FTSE 100 (^FTSE) was steady in early European trading to 9,648 points. For more details on market movements check our live coverage here.
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