Gold futures slipped toward $4,880 per ounce on Wednesday, as the Federal Reserve’s persistently hawkish pause and elevated US Treasury yields outweighed the metal’s safe-haven appeal amid escalating tensions in the Middle East. The FOMC left the federal funds rate unchanged at a target range of 3.5%–3.75% for a second straight meeting and indicated that only one rate cut is likely in 2026.
Gold initially drew support from reports of airstrikes on Iran’s South Pars gas field and the killing of intelligence minister Esmaeil Khatib. However, the Fed’s emphasis on inflation risks strengthened the US dollar, raising the opportunity cost of holding non-yielding assets such as bullion. Policymakers acknowledged that job gains have been modest and the labor market is showing signs of cooling, but stressed that the uncertain economic fallout from the effective closure of the Strait of Hormuz justified maintaining a restrictive policy stance.
