By: Economy Middle east

Gold prices held steady on Wednesday with modest gains as investors awaited a highly anticipated decision from the U.S. Federal Reserve regarding interest rates. Market optimism around easing U.S.-China trade tensions continues to limit the precious metal’s upside momentum, even as gold remains supported as a safe-haven asset amid ongoing global economic uncertainties.

In Dubai, gold rates declined, with 24-carat gold losing AED2.00 to AED476.00 and 22-carat gold falling AED2.25 to AED440.75. Additionally, 21-carat gold declined AED1.75 to AED422.75, and 18-carat gold ticked down AED1.75 to AED362.25.

Globally, spot gold decreased by approximately 0.10 percent, trading near $3,963.43 per ounce. Moreover, U.S. gold futures for December delivery sank 0.16 percent to $3,976.54. 

Meanwhile, spot silver gained 0.66 percent to $47.52 per ounce, platinum fell 0.3 percent to $1,580.00 and palladium increased 0.25 percent to $1,422.00. 

Gold prices find support around $3,950 level

Analysts note that gold prices recently found solid technical support around the $3,950 level, which helped forestall deeper declines. The price has been consolidating in a narrow band as market participants weigh the Federal Reserve’s forthcoming moves on monetary policy. The anticipated rate cut, widely expected by investors, traditionally reduces the opportunity cost of holding non-yielding assets like gold, potentially driving prices higher post-announcement. However, present trade optimism between the U.S. and China has somewhat dampened the usual flight-to-safety buying, creating a cautious market environment.

In European markets, gold prices exhibited minor fluctuations, with the price in euros per ounce registering a slight decline to around EUR3,397 (a 0.13 percent drop from the previous day), reflecting currency impacts and regional market dynamics. This subdued price movement aligns globally with the wait-and-see stance ahead of key central bank policy decisions.

In India, the world’s second-largest consumer of gold, prices have shown some downward pressure amid broader gold market volatility. The spot price in India for 24-karat gold hovered around INR12,081 per gram, with a generally cautious outlook as traders and investors monitor global cues for direction. Despite the recent pullback, gold remains highly valued within Indian markets due to cultural and investment demand.

Read more: Dubai 24-carat gold price today drops AED479; global rates briefly reclaim $4000 level as investors eye central bank rate cuts

Investor anticipation of Fed’s policy announcement

Investor focus remains sharply tuned to the Federal Reserve’s policy announcement expected later this week. A softer Consumer Price Index (CPI) report earlier this month bolstered hopes for an interest rate cut, which typically benefits gold by weakening the U.S. dollar and lowering yields on Treasury securities. For 2025, gold prices have experienced a remarkable rally, reaching record highs near $4,381 per ounce in mid-October before correcting moderately in recent sessions. 

Trade optimism between the U.S. and China also plays a crucial role in shaping investor sentiment. Signs of easing trade tensions reduce geopolitical risks and the associated safe-haven demand for gold. This dynamic has kept gold prices from making substantial gains despite the supportive backdrop from expectations of looser monetary policy.

Technical analysts are closely watching the $4,000 psychological level. Having traded above this threshold earlier in October, gold’s retreat below it has raised the question of whether the metal will stabilize above $3,850 in the near term or face further downside risk. The general consensus suggests a cautious trading range until the Federal Reserve provides clearer guidance.

Broader economic indicators also influence gold price movements. Persistent inflation concerns, uncertainties in equity markets, and geopolitical complexities in other regions contribute to gold’s appeal as a portfolio diversifier and store of value. However, rising optimism in global trade and economic recovery prospects could counterbalance these factors, keeping gold’s gains contained.