Gold inched higher today, reaching $2,036.76 per ounce by mid-morning trading as escalating Middle East tensions fueled safe-haven demand. Gains may be capped however heading into the Federal Reserve’s policy decision tomorrow.
While the Fed is expected to stand pat on interest rates, currently targeted between 5.25-5.50%, the central bank likely won’t yet feel ready to commence rate cuts despite easing inflation.
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Strong economic signals could mean underlying price growth takes longer to hit the Fed’s 2% target. Later this week, fresh jobs, manufacturing and consumer data could further test the Fed’s patience if pointing to resilient growth.
For now, simmering geopolitical uncertainty continues to draw investors to gold’s relative safety. But improving economic traction could dull bullion’s shine if the data bolsters the case for rates to remain elevated to fully extinguish inflation risks.