FX.co ★ Gold Rises as Investors Await Fed Rate Decision

Gold prices climbed more than 1% to around $4,350 an ounce on Wednesday, supported by a pullback in oil prices after a two-day rally, as investors looked ahead to the US Federal Reserve’s interest-rate decision for clearer policy signals.

The Fed is widely expected to raise rates for the first time since 2023, with futures markets, via the CME FedWatch Tool, assigning more than a 90% probability to at least a 25-basis-point hike. Such a move would likely be the first of two increases projected for this year, as persistent inflation and escalating tensions in the Middle East intensify pressure on policymakers to curb rising costs.

Monetary policy announcements from other major central banks are also in focus this week. The Bank of Japan is expected to lift interest rates on Friday to their highest level in 31 years, while the Bank of England is widely anticipated to leave rates on hold on Thursday, though that decision is regarded as a close call.