Gold Extends Winning Streak to Five Sessions as Iran Deal Eases Inflation Concerns Ahead of Fed Decision
Gold prices edged higher during Asian trading on Wednesday, marking a fifth consecutive session of gains as a temporary peace agreement between the United States and Iran eased concerns over energy-driven inflation. Meanwhile, investors remained focused on the Federal Reserve's highly anticipated policy decision later in the day.
Spot gold rose 0.3% to $4,342.56 per ounce as of 09:20 WIB, while U.S. Gold Futures gained 0.3% to $4,368.40 per ounce.
The precious metal has now advanced for five straight trading sessions after rebounding from multi-month lows near the $4,000 per ounce level.
Market sentiment has been supported by growing optimism surrounding the U.S.-Iran peace agreement, which aims to reduce tensions across the Middle East. The deal includes provisions allowing Iran to resume oil exports while extending the ceasefire as negotiations continue.
The agreement has contributed to a sharp decline in crude oil prices, helping to ease fears of another inflationary shock. Lower energy prices have prompted investors to scale back expectations for tighter monetary policy, creating a favorable environment for non-yielding assets such as gold.
Gold has also benefited from continued weakness in the U.S. dollar, with the U.S. Dollar Index hovering near a 10-day low. A softer dollar generally makes gold more attractive to holders of other currencies, providing additional support for bullion prices.
Focus Shifts to Federal Reserve Policy Decision
Investor attention is now firmly fixed on the Federal Reserve's first policy announcement under Chair Kevin Warsh. While the central bank is widely expected to leave interest rates unchanged, traders will closely analyze the updated economic projections and the closely watched “dot plot” for clues regarding the future path of monetary policy.
The market remains highly sensitive to any signals indicating whether policymakers still see room for interest rate cuts later this year.
A more hawkish stance from the Fed could push U.S. Treasury yields and the dollar higher, potentially limiting gold's recent rally. Conversely, dovish signals could further strengthen the precious metal's bullish momentum.
Central Bank Demand Continues to Support Gold
Underlying demand for gold remains robust. According to the latest World Gold Council survey, 45% of central bank reserve managers plan to increase their gold holdings over the next 12 months. The findings highlight gold's enduring appeal as a portfolio diversification tool and a hedge against geopolitical uncertainty.
Among other precious metals, silver rose 0.6% to $70.47 per ounce, while platinum gained 0.4% to $1,815.72 per ounce.
XAU/USD Outlook
The near-term outlook for XAU/USD will largely depend on the Federal Reserve's policy guidance and market expectations for future interest rate adjustments. While easing geopolitical risks have improved overall market sentiment, persistent central bank demand and a weaker U.S. dollar continue to provide strong support for gold prices.