Gold price remained steady in Asian trading on Wednesday as investors exercised caution ahead of the Federal Reserve’s interest rate announcement later in the day. Safe-haven demand was bolstered by escalating conflict between Israel and Iran, alongside reports of potential direct U.S. military involvement.
Earlier this week, gold gave back most of its recent gains following news that Iran was seeking a ceasefire. However, renewed military strikes and stern warnings from U.S. President Donald Trump towards Iran revived a risk-off sentiment among investors.
At 01:56 ET (05:56 GMT), spot gold held unchanged at $3,388.25 per ounce, while August gold futures were relatively flat at $3,405.95 per ounce.
Middle East Tensions Amplify Support for Gold
Geopolitical risks intensified as Israel and Iran entered their sixth consecutive day of aerial exchanges. Reports from the Wall Street Journal indicated that President Trump is considering possible U.S. military strikes on Iran, including targeting its nuclear command, and demanding Tehran’s “unconditional surrender.”
Meanwhile, Reuters reported that the U.S. military is deploying additional fighter jets to the Middle East and extending the deployment of other warplanes. Although the Pentagon described this military buildup as defensive, concerns are growing that the U.S. could become directly involved in the conflict.
Cooling U.S. Economic Data Adds to Gold’s Appeal
These geopolitical strains come amid weaker U.S. economic data. Retail sales in May dropped by 0.9%, reinforcing expectations that the Federal Reserve may cut interest rates later this year.
The Fed’s policy meeting concludes on Wednesday, with markets largely anticipating a pause but closely watching for updated economic forecasts and guidance.
As global markets await fresh Fed signals, ongoing Middle East tensions combined with soft U.S. data are expected to continue supporting gold prices.
Broader Metals Rally on Weaker Dollar
Other metals also experienced gains, helped by a softer U.S. dollar, which makes commodities cheaper for overseas buyers. The U.S. Dollar Index declined 0.2% in Asian trading.
Silver futures rose 0.6% to $37.37 per ounce, while platinum futures gained 0.5%, reaching $1,269.90 per ounce.
Copper prices also strengthened, with London Metal Exchange copper futures increasing 0.3% to $9,703.75 per ton, and U.S. copper futures rising 0.9% to $4.84 per pound.
