Gold prices rose in European markets on Wednesday, extending their recovery for the second day in a row from a three-week low, supported by continued buying at lower levels and a pause in the US dollar's upward momentum in the foreign exchange market.

The Federal Reserve is set to conclude later today its fifth scheduled meeting of 2025 to discuss appropriate monetary policy for the world's largest economy. Markets widely expect interest rates to remain unchanged for the fifth consecutive meeting.

To reassess the likelihood of a rate cut in September, markets are awaiting a series of key labor market data releases from the United States.

Price Overview

• Gold Price Today: Gold rose by 0.25% to $3,333.73, up from the session’s opening at $3,326.51, after hitting a low of $3,321.98.

• On Tuesday, gold settled with a 0.35% gain — its first daily rise in the past five sessions — recovering from a three-week low at $3,301.94 per ounce.

US Dollar

The US Dollar Index declined by 0.2% on Wednesday, pulling back from a five-week high at 99.14 points, reflecting a pause in the greenback’s rally against a basket of global currencies.

In addition to profit-taking, dollar levels are retreating as investors hold off on opening new positions ahead of the Fed’s policy meeting, which could offer stronger signals about a possible rate cut in September.

Federal Reserve

The Federal Reserve will conclude its fifth regular meeting of 2025 later today to assess appropriate monetary policy amid evolving economic conditions. Interest rates are expected to remain unchanged at 4.50% for the fifth straight meeting.

The Fed's interest rate decision and policy statement will be released at 19:00 GMT, followed by Chair Jerome Powell’s press conference at 19:30 GMT.

Powell’s remarks are expected to offer more clarity on the likelihood of rate cuts this year, especially in light of recent economic developments and fading concerns over Trump’s tariff policies.

US Interest Rate Expectations

• According to CME Group’s FedWatch tool, the probability of a 25-basis-point rate cut at today’s meeting is priced at 2%, with a 98% chance of no change.

• The probability of a 25-basis-point cut in September currently stands at 64%, versus a 36% chance of rates remaining unchanged.

• To reprice these odds, markets await several important labor market releases this week, including today’s private sector employment report, Thursday’s weekly jobless claims, and Friday’s July non-farm payrolls report.

Gold Outlook

Kelvin Wong, Market Analyst for Asia-Pacific at OANDA, noted: “There is a possibility the Fed could adopt a hawkish stance, which is evident from US Treasury yields,” adding that “the strength of the US dollar has also faded at this stage.”

Wong added: “If gold prices surpass $3,350 by the end of this week, considering the upcoming European inflation data and the US jobs report, this could restore upward momentum, at least in the short term.”

SPDR Gold Trust

Holdings of the SPDR Gold Trust — the world’s largest gold-backed exchange-traded fund — remained unchanged yesterday at 956.23 metric tons.

The euro rose in European markets on Wednesday against a basket of global currencies, marking its first gain in five sessions versus the US dollar. The rebound came as investors bought the euro from lower levels, while the dollar’s upward momentum paused in the forex market.

Expectations of a European rate cut in September declined following last week’s hawkish European Central Bank meeting. Investors now await key upcoming economic data from the eurozone — especially July inflation figures — to reprice those expectations.

Price Overview

• EUR/USD today: The euro climbed 0.25% to $1.1573, from an opening price of $1.1546. The session low stood at $1.1545.

• On Tuesday, the euro ended down 0.35% versus the dollar — its fourth straight daily loss — after hitting a five-week low of $1.1516 following a German-French backlash against the recent EU-US trade deal.

US Dollar

The US Dollar Index fell 0.2% on Wednesday, retreating from a five-week high of 99.14 points, reflecting a pause in the greenback’s advance against major currencies.

Beyond profit-taking, dollar levels declined as investors refrained from building new long positions ahead of the US Federal Reserve’s policy statement. Markets are looking for strong clues regarding the likelihood of a September rate cut.

The Fed concludes its crucial policy meeting later today. Markets widely expect rates to remain unchanged for the fifth consecutive meeting as officials assess appropriate policy for the world’s largest economy.

ECB Policy Outlook

• Last week, the ECB held its key interest rates steady at 2.15% — the lowest since October 2022 — after having cut rates at the previous meeting for the seventh straight time.

• The ECB opted to pause its easing cycle amid uncertainty surrounding future US trade relations.

• ECB President Christine Lagarde said after the meeting, “We are in wait-and-see mode,” and added that the eurozone economy has shown resilience despite global uncertainty.

• According to Reuters sources, a clear majority at the ECB meeting preferred to keep rates unchanged again in September.

• Money markets now price in less than a 30% chance of a 25 basis-point ECB rate cut in September, down from 50% previously.

• To reassess these probabilities, investors are watching closely for upcoming eurozone data and ECB official commentary.

Euro Outlook

• At Economies.com Today, we expect that if the Federal Reserve’s comments turn out to be less hawkish than expected, the probability of a US rate cut in September will increase — likely fueling further euro recovery against the dollar.

The Japanese yen rose in Asian markets on Wednesday against a basket of major and minor currencies, continuing its recovery for the second consecutive day from a two-week low versus the US dollar. This was driven by buying activity at lower levels and a pause in the dollar's recent rally in the foreign exchange market.

The Bank of Japan’s policy meeting begins today, with decisions expected on Thursday. The bank is widely expected to keep interest rates unchanged for the fourth consecutive meeting at 0.50%, the highest level since 2008 when the global financial crisis began.

Price Overview

• USD/JPY today: The dollar declined by 0.45% against the yen to ¥147.85, down from the opening price of ¥148.45. The pair recorded a session high at ¥148.53.

• On Tuesday, the yen gained less than 0.1% against the dollar at settlement — its first gain in four days — after earlier hitting a two-week low at ¥148.81.

US Dollar

The US Dollar Index fell 0.2% on Wednesday, pulling back from a five-week high of 99.14 points, reflecting a pause in the greenback’s climb against a basket of global currencies.

In addition to profit-taking, the dollar declined as investors refrained from building new long positions ahead of the US Federal Reserve’s policy decision, which may offer strong signals reinforcing the likelihood of a rate cut in September.

The Fed concludes its critical monetary policy meeting later today, with broad expectations of holding interest rates steady for the fifth straight meeting — amid ongoing assessments of appropriate policy for the world’s largest economy.

Bank of Japan

The Bank of Japan’s policy meeting begins today, with decisions due Thursday. Rates are expected to remain unchanged at 0.50% for the fourth consecutive meeting — still the highest level since the 2008 financial crisis.

BOJ policymakers are also expected to discuss the potential impact of Japan’s recent trade agreement with the US on the country’s export-driven economy. This may become a key factor in determining the timing of the next rate hike.

With monetary policy expected to stay steady, markets will focus on BOJ Governor Kazuo Ueda’s post-meeting comments for any hints on whether global economic pessimism might influence the pace of Japan’s future rate hikes.

Yen Outlook

• At Economies.com Today, we expect the yen to remain in positive territory against the US dollar — particularly if the Federal Reserve responds to Trump’s criticism and adopts a more dovish approach.

Soybean and corn futures fell on the Chicago Board of Trade on Tuesday, pressured by abundant global supplies, weak demand, and continued favorable weather for crops in the US Midwest.

Corn prices came under additional pressure due to expectations of a bumper US harvest, supported by forecasts of favorable weather in the Corn Belt. Meanwhile, wheat prices declined as harvests accelerated across the Northern Hemisphere, boosting expectations of higher global supply.

Oli Hough of IKON Commodities in Sydney stated: “Soybeans remain under pressure due to large expected crops in both the US and globally. It’s hard to see this market rallying significantly in the coming months.”

Weak export demand further weighed on soybeans, as the latest weekly US export sales figures disappointed.

On the trade front, the US and the European Union reached a framework agreement on Sunday that included a 15% import tariff on most European goods, avoiding a full-blown trade war that could have jeopardized a trade relationship representing about one-third of global commerce.

A German trader commented: “The US-EU agreement mentioned the potential removal of tariffs on some agricultural products, but the lack of details makes it difficult to judge.” He added, “Still, there’s general relief that a destructive trade war between the US and the EU has been averted.”

The German trader also noted that wheat is burdened by both weak demand and an influx of supply from ongoing harvests in the US, EU, and Black Sea region.

“There are virtually no wheat purchase tenders in the market at the start of the week,” he said.

“Russian farmers were initially reluctant to sell their new crop, but with harvest season expanding in Russia, they may be forced to increase exports, as they can’t store the entire crop.”

Corn

In trading, December corn futures fell by 0.7% to close at $4.11 per bushel.

Soybeans

November soybean futures declined by 0.2% to $10.09 per bushel.

Wheat

September wheat futures dropped by 1.6% to settle at $5.26 per bushel.