TLDR
- Gold fell about 1% on Wednesday as the US dollar index rose 0.4% to 102.26.
- Spot gold traded near $4,126 an ounce before paring losses to around $4,167 later in the session.
- Investors are waiting for minutes from the Federal Reserve’s September meeting, when rates were raised for the first time since 2023.
- Rising oil supply from the Middle East and falling bond yields have eased pressure for another Fed rate hike this month.
- Central banks bought 39 tonnes of gold in August, bringing year-to-date purchases to 170 tonnes, according to World Gold Council data.
Gold prices moved lower on Wednesday as a stronger US dollar put pressure on the metal. Traders are also waiting for minutes from the Federal Reserve’s latest meeting for hints about future interest rate moves.
By mid-morning trading, spot gold had fallen 0.9% to $4,126.02 an ounce. Gold futures dropped 0.8% to $4,151.90 an ounce.
The US dollar index rose 0.4% to 102.26. A stronger dollar makes gold more expensive for buyers using other currencies, which can lower demand.
Fed Rate Decision Still in Focus
Markets are focused on the Fed’s September meeting, where officials raised interest rates for the first time since 2023. Projections at the time pointed to more rate increases before the end of the year.
🏛️LIVE: The Fed's FOMC minutes drop TODAY at 2PM ET.
This was Kevin Warsh’s first rate hike as Fed Chair in a unanimous 12-0 vote to raise rates to 3.75%-4.00%.
What we already know:
– dot plot shows one more hike in 2026
– inflation is still running too hot at ~3.7%
– Oct… pic.twitter.com/SWZq4nyUNd— Coin Bureau (@coinbureau) October 7, 2026
Inflation has stayed above the Fed’s 2% target for months. Much of this has been tied to higher energy prices caused by the ongoing war between the US and Iran.
Despite that outlook, expectations for another hike at the Fed’s October meeting have dropped. Several Fed officials have downplayed the need for quick action.
Recent jobs data also came in weaker than expected. This has made policymakers more cautious about raising rates too fast, since that could hurt the broader economy.
Higher interest rates tend to weigh on gold prices. That is because gold does not pay interest, so holding it becomes less attractive when other assets offer better returns.
Traders are now pricing in less than a one-in-five chance of a rate hike in October. That is down from about 40% odds just a week earlier.
Oil Supply and Bond Yields Ease Pressure
Later in the trading session, gold steadied and climbed back toward $4,167 an ounce. This came as oil supply from the Middle East increased and bond yields fell.
Shell Chief Executive Wael Sawan said Tuesday that oil flows from the region are back to around 80% of levels seen before the conflict began. Other banks and shipping analysts have given similar estimates.
Still, risks remain in the region. Iran has stepped up attacks on tankers moving through the Strait of Hormuz in recent days.
Oil executives have warned that the world is running low on backup options to manage the impact of the conflict. The war between the US and Iran is now in its eighth month.
Treasury yields pulled back Tuesday after oil prices stabilized. This followed a stretch where longer-term yields had climbed to their highest levels in decades.
Stocks rose to record highs on Tuesday. Investors are betting that US companies can handle ongoing inflation pressures.
Central bank buying has continued to support gold even as rate concerns weigh on the metal. World Gold Council data showed central banks added 39 tonnes of gold in August.
That brings total central bank gold purchases this year to 170 tonnes. Analysts at ING pointed to this steady buying as a source of support for prices.
Gold is still down more than 20% since the US-Iran conflict began in late February. Central bankers meeting in Italy this week highlighted gold’s growing role in reserve diversification as geopolitical risks continue.
As of early Wednesday in Singapore, spot gold was little changed at $4,167.05 an ounce. Silver held steady at $61.34, while platinum and palladium prices were stable.
The Fed’s September meeting minutes are due later Wednesday and are expected to offer the next clues on the path for interest rates.
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