Gold gives up two-week high before Fed's appointments

Gold prices declined in European markets on Wednesday for the first time in five sessions, retreating from a two-week high due to active correction and profit-taking. However, further losses were limited by a weaker US dollar against a basket of global currencies.

Trading remained within a tight range as investors avoided building large positions ahead of President Donald Trump’s upcoming decisions on Federal Reserve appointments.

The Price

• Gold prices today: Gold fell by 0.35% to $3,369.15, down from the opening level of $3,380.64. The session high was $3,385.41.

• At Tuesday’s settlement, gold prices rose by 0.2%, marking a fourth consecutive daily gain, and hit a two-week high of $3,390.51 per ounce, supported by rising expectations of a US interest rate cut in September.

The US Dollar

The US Dollar Index declined by 0.1% on Wednesday, resuming losses after a two-day pause and nearing a two-week low — reflecting weakness in the US dollar against global currencies.

Market pricing for a 25-basis-point US interest rate cut in September rose from 85% to 90% following data showing an unexpected slowdown in US services activity during July.

Trump Appointments

Markets are closely watching President Donald Trump’s nominations to the Federal Reserve following the resignation of Governor Adriana Kugler last Friday, as well as his pick for the head of the Bureau of Labor Statistics.

Trump stated on Tuesday that he would soon announce decisions regarding Kugler’s short-term replacement, including his choice for the next Federal Reserve Chair. Treasury Secretary Scott Bessent has been ruled out as a candidate to succeed current Chair Jerome Powell, whose term ends in May 2026.

Trump said that Bessent “does not want” to become Fed Chair, but noted that four other candidates remain in contention.

US Interest Rates

• San Francisco Fed President Mary Daly stated on Monday that, amid increasing evidence of labor market weakness and no indication of ongoing inflation from tariffs, the time has come to lower interest rates.

• According to CME Group’s FedWatch Tool, the probability of a 25-basis-point rate cut in the September meeting currently stands at 88%, while the chance of no change is at 12%.

• For the October meeting, the probability of a 25-basis-point cut is holding at 95%, with a 5% chance of no change.

• To reprice these expectations, investors are awaiting comments from several Federal Reserve officials throughout the day.

Gold Outlook

Bryan Lan, managing director at Singapore-based trading firm GoldSilver Central, said: “We see gold holding up, and in fact, it’s slightly trending higher.” He added: “We expect gold to test the upper end of the trading range near $3,393, and possibly even $3,400.”

SPDR Fund

Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by approximately 1.14 metric tons on Tuesday — the second consecutive daily increase — bringing the total to 955.94 metric tons, the highest level since July 28.