Gold Prices Stabilize Awaiting the U.S. Federal Reserve's Decision on Interest Rates
After waiting for investors, gold prices stabilized during trading on Monday, as the market looks forward to the Federal Reserve (U.S. Central Bank) meeting this week, where a rate cut is expected to be announced.
Spot gold recorded stability at $3644.44 per ounce, after achieving strong gains of 1.6% last week, culminating in a record level of $3673.95 last Tuesday. In contrast, December gold futures saw a slight decline of 0.1% to reach $3681.30 per ounce.
In terms of currencies, the dollar index rose by 0.1%, increasing the cost of purchasing gold priced in dollars for holders of other currencies.
Although U.S. inflation data for August came in slightly above expectations, it did not change investors' expectations that the U.S. Federal Reserve will cut interest rates by a quarter percentage point on Wednesday.
In this context, Tim Waterer, Senior Market Analyst at KCM Trade, commented to Reuters, saying: "Positive expectations remain, but a period of consolidation or a slight pullback could be a healthy outcome that supports gold's ambition to reach higher price targets in the future."
However, he added a warning: "The risk for gold this week lies in the possibility that the Fed may not be clear enough in signaling when the next rate cut will occur."
It is noteworthy that gold, which does not yield returns, is typically viewed as a safe haven during times of turmoil and tends to perform well in an environment of low interest rates.
The Fed meets this week amid multiple challenges, including a legal dispute over its leadership and President Donald Trump's efforts to exert more control over interest rate policy and the broader role of the central bank.
On the other hand, data showed that speculators reduced their net long positions in gold futures by 2,445 contracts to reach 166,417 contracts during the week ending September 9.
In a comment on future prospects, Goldman Sachs said in a note released on Friday: "While we see that the risks surrounding our forecast of $4,000 per ounce by mid-2026 lean to the upside, the increase in speculative bets raises the risk of tactical pullbacks, as speculative positions tend to revert to their mean."
The rest of the precious metals performed positively, with spot silver rising by 0.3% to $42.29 per ounce, platinum increasing by 0.9% to $1403.77, while palladium rose by 0.2% to $1199.35.
