Gold prices fell in European trading on Wednesday for the first time in four sessions, giving up the one-week high recorded earlier in Asian trade, amid renewed correction and profit-taking activity, and under pressure from a stronger US dollar.
A series of key US economic data releases are due later today, which are expected to provide strong clues on the future path of Federal Reserve monetary policy and US interest rates.
Price overview
• Gold prices today: Gold fell by 1.2% to $4,441.67, from an opening level of $4,494.79, after touching a session high of $4,500.45, the highest level in a week.
• At Tuesday’s settlement, the precious metal gained 1.05%, marking a third consecutive daily advance, supported by rising geopolitical tensions following the US strike in Venezuela.
US dollar
The US dollar index rose by 0.1% on Wednesday, extending gains for a second straight session and approaching a four-week high, reflecting continued strength of the US currency against a basket of major and minor currencies.
This advance comes as investors increasingly favor the dollar as one of the most attractive alternative investment assets amid elevated global geopolitical risks, and as one of the best available investment opportunities, particularly in light of a stream of weak economic data from Europe and China.
US interest rates
• Stephen Miran, a Federal Reserve governor whose term ends later this month, said on Tuesday that a sharp cut in US interest rates is needed to sustain economic growth.
• Minneapolis Federal Reserve President Neel Kashkari, a voting member of the rate-setting committee this year, said he sees a risk of a sharp rise in the unemployment rate.
• According to the CME FedWatch tool, markets are currently pricing an 84% probability that US interest rates will remain unchanged at the January 2026 meeting, versus a 16% probability of a 25-basis-point rate cut.
• Investors are currently pricing in two US rate cuts over the course of next year, while Federal Reserve projections point to just one 25-basis-point cut.
• To reassess these expectations, investors are closely watching a series of key US economic releases, including private sector employment data, job openings figures, and services sector activity.
Gold outlook
Capital.com analyst Kyle Rodda said prices are “not being driven heavily by fundamentals, as there is a lot of speculation,” noting that price action has largely been upward but remains characterized by two-way volatility. He added that the US dollar is also playing a role in pressuring prices.
SPDR Gold Trust
Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by around two metric tons on Tuesday, lifting total holdings to 1,067.13 metric tons.
