Gold prices rose on Wednesday as oil retreated from recent highs and markets positioned for a highly anticipated Federal Reserve interest-rate decision later in the day.
Spot gold gained 0.9 percent to $4,331.73 an ounce, rebounding from a two-day decline. U.S. gold futures also rose 0.9 percent to $4,373.50 an ounce.
The U.S. dollar eased from near multi-week highs, while yields on U.S. Treasury securities remained largely unchanged ahead of the Federal Reserve’s policy announcement.
Markets are currently pricing in approximately a 92 percent probability of a quarter-point rate increase, which would raise the federal-funds target range from 3.75–4.00 percent to 4.00–4.25 percent.
This would represent the Fed’s first rate hike since 2023, following a recent surge in inflation data. A surprise hold or a notably dovish stance could have a significant negative impact on financial markets.
It remains uncertain whether the policy statement, revised economic projections, and Chair Kevin Warsh’s press conference would align with market expectations for continued rate increases.
Traders were also reacting to a slight decline in crude oil prices after industry data revealed an unexpected build in U.S. crude inventories. Additionally, reports indicated that Saudi Arabia is offering additional crude supplies to Asian refiners via ship-to-ship transfers off Oman’s Sohar port, which helped alleviate concerns about the magnitude of Middle East supply disruptions.