Gold prices rose more than 1.5% in European trading on Wednesday, rebounding from a three-week low and climbing back above $4,000 per ounce. The metal is on track for its first gain in four sessions, supported by renewed buying at corrective levels.

The Federal Reserve concludes its seventh policy meeting of 2025 later today, with markets widely expecting a 25-basis-point rate cut — the second consecutive reduction — as policymakers assess conditions in the world’s largest economy.

Price Overview

• Gold prices climbed about 1.7% to $4,019.76 an ounce, up from an opening level of $3,951.50, after hitting an intraday low of $3,915.48.

• On Tuesday, gold settled 0.75% lower — its third straight daily loss — marking a three-week low at $3,886.64 per ounce amid optimism over global trade negotiations.

Trade Developments

US President Donald Trump began the final leg of his Asian tour in South Korea on Wednesday, expressing optimism about making progress on a long-delayed tariff deal with President Lee Jae-myung and securing a trade truce with Chinese President Xi Jinping.

Trump and Xi are scheduled to meet Thursday in South Korea — their first encounter during Trump’s second term — in what is expected to be a pivotal moment for US-China relations, particularly regarding global trade policy and geopolitical tensions across Asia.

Federal Reserve

The Federal Reserve will announce its interest rate decision and policy statement at 18:00 GMT, followed by Chair Jerome Powell’s press conference at 18:30 GMT.

Markets expect the Fed to cut rates by 25 basis points, with investors looking for guidance on whether another reduction could follow later this year, as well as hints about the policy trajectory heading into 2026.

Market Outlook

• Peter Fertig, analyst at Quantitative Commodity Research, said: “Bargain-hunting may be driving gold’s rebound since it has lost over 10% of its value, making it attractive again — especially as fundamental supports for gold remain intact.”

• Fertig added that some central bank reserve managers may have seen the recent pullback as an opportunity to accumulate more gold.

• ANZ Bank noted in a research memo: “Progress in US-China trade talks continues to weaken demand for safe-haven assets like gold, which has declined as tensions ease. However, recent dips may offer central banks a chance to boost their gold holdings.”

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged on Tuesday, remaining at 1,038.92 metric tons — the lowest level since October 16.

The euro fell in European trading on Wednesday against a basket of major currencies, retreating from a one-week high versus the US dollar and heading toward its first loss in six sessions, as the greenback rebounded ahead of the Federal Reserve’s policy decision.

Renewed inflationary pressure in the eurozone has dampened expectations that the European Central Bank (ECB) will cut interest rates during its meeting later today. The meeting’s outcome is expected to provide fresh clues on the path of European rates through the remainder of this year and into next.

Price Overview

• EUR/USD declined 0.2% to 1.1627, down from an opening level of 1.1651, after touching a session high of 1.1661.

• The euro had gained about 0.1% on Tuesday — its fifth straight daily rise — reaching a one-week high of 1.1669 amid improved risk sentiment.

US Dollar

The dollar index rose more than 0.2% on Wednesday, rebounding from a one-week low and heading for its first gain in three sessions, reflecting renewed strength in the US currency ahead of the Fed’s policy announcement later today.

The Fed is widely expected to deliver a 25-basis-point rate cut — its second consecutive reduction — though policymakers could adopt a slightly more hawkish tone given signs of renewed inflationary pressure in the US, potentially lowering the odds of another rate cut before year-end.

European Central Bank

• The ECB begins its policy meeting later today to assess appropriate monetary policy in light of recent economic developments across the euro area, with a decision due Thursday.

• The Bank is widely expected to keep interest rates unchanged at 2.15%, the lowest level since October 2022, marking a third consecutive hold.

• Markets are looking for guidance on when the ECB might resume its easing cycle and potentially lower rates again before year-end.

Euro Outlook

According to Economies.com: If the Federal Reserve’s comments turn out more hawkish than markets anticipate, expectations for another US rate cut this year will likely fade — a scenario that would support continued dollar gains against major counterparts, particularly the euro and the British pound.

The Australian dollar rose broadly in European trading on Wednesday against a basket of major currencies, extending gains for the sixth consecutive session versus the US dollar and hitting a three-week high. The currency has become one of the most attractive investment opportunities in the forex market following hotter-than-expected inflation data from Australia.

The strong inflation figures renewed pressure on policymakers at the Reserve Bank of Australia (RBA) and sharply reduced expectations for a rate cut at the November meeting.

Price Outlook

• AUD/USD climbed 0.4% to 0.6608 — its highest since October 9 — up from the opening level of 0.6583, after touching an intraday low of 0.6579.

• The pair ended Tuesday up 0.45%, marking its fifth straight daily gain, supported by positive trade developments between the US and China.

Inflation in Australia

Data from the Australian Bureau of Statistics on Wednesday showed that consumer prices rose 1.3% in the third quarter — the fastest pace since Q1 2023 and above market expectations of 1.1%, following a 0.7% increase in Q2.

On a monthly basis, headline CPI rose 3.5% year-on-year in September, the highest since July 2024, exceeding expectations of 3.1% and up from 3.0% in August.

Australian Inflation Hits 14-Month High

The figures confirm that inflation is accelerating again and remains above the RBA’s 2–3% medium-term target range, lowering the likelihood of further rate cuts this year.

Interest Rate Outlook

• Following the data, market pricing for a 25-basis-point RBA rate cut in November dropped from 70% to just 25%.

• The RBA held rates at 3.60% in September after three reductions earlier this year, awaiting more economic data before taking further action.

Analyst Views

Adam Boynton, Head of Australian Economics at ANZ Bank, said: “If the economy proves materially weaker than expected, the RBA retains the option to ease policy in December, but the bar for any cut this year is now very high.”

He added: “We expect the most likely path to be a final 25-basis-point cut in the first half of 2026, though there’s a risk that our February call could be delayed — or may not happen at all.”

Apple and Microsoft shares climbed on Tuesday, pushing each company’s market capitalization above the $4 trillion mark — a historic milestone for America’s technology titans.

Despite the gains, both firms still trail Nvidia, currently the world’s most valuable company, with a market cap exceeding $4.6 trillion. Microsoft first hit the $4 trillion level in July.

Microsoft shares rose nearly 3% after confirming it had completed the acquisition of a 27% stake in OpenAI’s for-profit entity, deepening its partnership that began in 2019.

Apple, meanwhile, reached this achievement for the first time in its history, driven by robust sales of the iPhone 17 series launched in September, which has outperformed previous models.

Apple’s stock has gained 25% over the past three months, with its fiscal fourth-quarter earnings due Thursday, while Microsoft is set to report on Wednesday.

J.P. Morgan analyst Samik Chatterjee wrote Monday that “Apple shares are heading into earnings with their strongest positive momentum in a year,” raising his price target to $290 with an “Overweight” rating.

Chatterjee also noted that Apple successfully avoided major tariff-related disruptions under the Trump administration by shifting much of its US-bound supply chain to India and Vietnam, while maintaining cooperative ties with Washington on domestic manufacturing.

“The announcement of increased local investment, combined with the rapid shift of production outside China (to India and Vietnam), has improved Apple’s position under the current tariff environment,” he wrote.

The Role of Artificial Intelligence

The year 2025 has been remarkable for Big Tech. From breakthroughs in artificial intelligence to steady growth in core operations, companies such as Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla now make up roughly one-third of the total market value of the S&P 500.

This dominance has attracted investors seeking firms with strong balance sheets, recurring revenues, and early leadership in AI. From Microsoft’s Azure cloud and Copilot suite to Apple’s deepening integration of AI into its devices — alongside Google’s Gemini and Meta’s Llama models — each is a pillar of the expanding AI ecosystem, spanning infrastructure to applications.

Nvidia was the first to break the $4 trillion barrier, thanks to its lead in AI chips. But Apple and Microsoft are rapidly closing in, doubling down on AI investments using their enormous cash reserves — betting the technology will transform both software and consumer hardware.

Analysts say reaching this symbolic threshold underscores the growing dominance of these firms, with even small price movements in their shares capable of shifting entire market indices.

Both companies face an immediate test this week as they report earnings, with investors looking for concrete evidence that AI is driving revenue growth — and whether the recent rally still has room to run.

“iPhones account for more than half of Apple’s revenue and profit, and every additional device sold brings users deeper into its ecosystem,” said Chris Zaccarelli, Chief Investment Officer at Northlawn Asset Management.

Apple shares had struggled earlier this year amid fierce competition in China and concerns over US tariffs’ impact on Asian economies, including China and India, where its manufacturing base is concentrated.

However, the company’s latest models — from the iPhone 17 to the iPhone Air — have drawn customers back to stores from Beijing to Moscow within weeks of launch, even as Apple absorbed higher import costs.

Data from Counterpoint Research showed iPhone 17 sales outpacing its predecessor by 14% in the US and China. Evercore ISI expects Apple to surpass market forecasts for the September quarter and issue an upbeat outlook for year-end.

Apple is now the third company in history to achieve a $4 trillion market cap, following Nvidia and Microsoft. Nvidia’s current valuation exceeds $4.5 trillion.

Apple’s stock trades at 33.2 times its expected 12-month earnings, compared with 27.4 times for the Nasdaq 100 index, according to LSEG data.

Despite gaining about 7% year-to-date, Apple’s performance still lags the tech-heavy Nasdaq, which has risen roughly 22% over the same period.