Gold prices fell in the European market on Wednesday for the first time in four days, retreating from their all-time highs, pressured by profit-taking activity and a rebound in the U.S. dollar against a basket of major currencies.

The Federal Reserve will conclude later today its sixth policy meeting of 2025 to discuss appropriate monetary policy for the world’s largest economy, with expectations pointing to a 25-basis-point interest rate cut.

Price Overview

• Gold prices today: gold declined by 0.75% to (3,662.69$), from an opening level of (3,690.06$), after recording an intraday high of (3,695.40$).

• At Tuesday’s settlement, gold prices rose by 0.3%, marking a third consecutive daily gain, and reached an all-time high of 3,703.30$ an ounce.

U.S. Dollar

The dollar index rose on Wednesday by 0.2%, holding above a ten-week low at 96.56 points, reflecting a rebound in the U.S. currency against a basket of peers, which in turn weighed negatively on gold and other dollar-denominated commodities.

Beyond low-level buying, this rebound comes as investors paused from building fresh short positions while awaiting the outcome of the Fed’s critical policy meeting.

Federal Reserve

The Federal Reserve will conclude later today its sixth scheduled meeting of 2025 to set appropriate monetary policy for the U.S. economy, with expectations of a 25-basis-point cut — the first U.S. interest rate reduction since December 2024.

The policy decision, along with the monetary policy statement and updated economic projections, is due at 19:00 GMT, followed by Fed Chair Jerome Powell’s press conference at 19:30 GMT.

The data and remarks are expected to provide stronger guidance on whether additional rate cuts will be delivered later this year, particularly amid ongoing pressure from President Donald Trump for deeper easing to cushion housing-sector risks.

U.S. Interest Rates

• According to CME Group’s FedWatch tool: market pricing for a 25-basis-point cut at this week’s meeting remains at 100%, while odds of a 50-basis-point cut stand at 4%.

• For October, the probability of a 25-basis-point cut is also fully priced at 100%, with 50-basis-point odds steady at 3%.

Outlook for Gold

Tim Waterer, chief market analyst at KCM Trade, said gold’s rally to the 3,700$ level was supported by dollar weakness alongside bets that the Fed may signal further easing before year-end.

He added that profit-taking near the 3,700$ mark pulled the metal back below that level, but if the Fed adopts a strongly dovish stance at this meeting, gold could attempt another push toward fresh record highs.

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 3.14 metric tons on Tuesday, marking a second consecutive daily increase, bringing the total to 979.95 metric tons — the highest in about a week.

The British pound edged lower in the European market on Wednesday against a basket of global currencies, giving up its highest level in ten weeks against the U.S. dollar, due to correction and profit-taking activity, coinciding with the U.S. currency holding steady ahead of the Federal Reserve’s policy decisions.

The Bank of England meets tomorrow, Thursday, to discuss monetary policy tools appropriate for the developments in the U.K. economy, with full expectations that British interest rates will remain unchanged.

To reprice the probabilities of a British rate cut during the remainder of this year, investors are awaiting the release later today of key U.K. inflation data.

Price Overview

• GBP exchange rate today: the pound fell against the dollar by 0.1% to (1.3639$), from today’s opening price of (1.3652$), recording a high of (1.3660$).

• On Tuesday, the pound rose by 0.35% against the dollar, marking a second consecutive daily gain, and reached its highest level in ten weeks at 1.3672$, supported by the decline in the dollar and U.S. yields.

U.S. Dollar

The dollar index rose on Wednesday by less than 0.1%, holding above a ten-week low at 96.56 points, reflecting a slight rebound in the U.S. currency against a basket of global peers.

In addition to buying activity from low levels, this rebound comes as investors pause from building new short positions while awaiting the results of the crucial Federal Reserve policy meeting.

The U.S. central bank is expected to cut interest rates by only 25 basis points, despite continued pressure from Donald Trump on U.S. monetary policymakers to implement deeper cuts to address risks in the housing market.

British Interest Rates

• Following mixed labor market data from the U.K. on Tuesday, market pricing for a 25 basis point rate cut by the Bank of England at Thursday’s meeting remains below 20%.

• The Bank of England meets tomorrow to discuss monetary policy in light of recent U.K. economic developments, particularly growing concerns about financial stability.

• The vote on cutting British interest rates during the August meeting revealed clear division among members over the path of monetary easing.

U.K. Inflation Data

To reprice the existing probabilities regarding British interest rates, investors are awaiting the release later today of U.K. inflation data for August, which is expected to strongly influence the Bank of England’s policy path.

At 07:00 GMT, the consumer price index is expected to rise by 3.9% year-on-year in August, compared with a 3.8% increase in July. The core CPI is expected to rise by 3.7% year-on-year, down from 3.8% in the previous month.

Outlook for the Pound

At Economies.com we expect: if U.K. inflation data comes in higher than market forecasts, the probability of a British interest rate cut before the end of this year will decline, which would push the pound to higher levels against the U.S. dollar, reaching fresh multi-month highs.

The Japanese yen rose in the Asian market on Wednesday against a basket of major and minor currencies, extending its gains for the third consecutive day against the U.S. dollar, recording the highest level in two months, supported by the weak performance of the U.S. currency ahead of an expected Federal Reserve decision to cut interest rates by about 25 basis points.

The important monetary policy meeting of the Bank of Japan begins tomorrow, Thursday, with decisions due on Friday, where interest rates are expected to remain unchanged for the fifth consecutive meeting.

Price Overview

• Japanese yen exchange rate today: the dollar fell against the yen by about 0.2% to (146.21¥), the lowest since July 24, from today’s opening price of (146.48¥), with a high of (146.55¥).

• The yen ended Tuesday’s session up by 0.6% against the dollar, marking its second daily gain in a row, due to renewed pressure from the U.S. administration under Donald Trump on the Federal Reserve.

U.S. Dollar

The dollar index fell on Wednesday by less than 0.1%, extending its losses for the third consecutive session, close to touching a ten-week low at 96.56 points, reflecting the continued weakness of the U.S. currency against a basket of global currencies.

This weak performance comes as Trump renewed pressure on Federal Reserve policymakers to implement deeper interest rate cuts. The U.S. central bank is expected to announce later today a benchmark rate cut of about 25 basis points.

In a social media post on Monday, Donald Trump urged Federal Reserve Chairman Jerome Powell to implement a “larger” cut in the benchmark interest rate, citing risks facing the U.S. housing market.

Bank of Japan

• The Bank of Japan meets tomorrow, Thursday, to discuss the monetary policy suitable for the developments of the world’s fourth-largest economy, with decisions to be announced on Friday.

• Market pricing of the probability that the bank will raise Japanese interest rates by a quarter point at this meeting is currently around 20%.

• With expectations steady for keeping Japanese interest rates unchanged for the fifth consecutive meeting, focus will similarly be on Governor Kazuo Ueda’s comments regarding the future policy path.

Outlook for the Yen

At Economies.com, we expect the Japanese yen to continue moving in the positive zone against the U.S. dollar, especially if the results of the Federal Reserve meeting come in less aggressive than markets are currently anticipating.

Most cryptocurrencies rose during trading on Tuesday amid optimism in the markets that the Federal Reserve is moving toward cutting interest rates.

Economic data released today showed an increase in the U.S. retail sales index during August by 0.6%, while analysts had expected the index to grow by 0.2% after growth of 0.5% during July, which was revised upward to 0.6%.

The Fed meeting began today, Tuesday, and ends tomorrow, Wednesday, with widespread expectations of an interest rate cut of 25 basis points, amid Trump’s pressure to lower borrowing costs at a faster pace.

According to the FedWatch tool from CME Group, markets see a 99.6% probability of a 25 basis point cut, versus only a 0.4% chance of keeping rates unchanged.

Ripple

On the trading front, the price of Ripple rose by 1.9% to $3.05 on the CoinMarketCap platform as of 21:18 GMT.