Gold is Rising as Investors Await the Fed Meeting

Gold is rising for a second consecutive day as investors await the minutes from the latest Federal Reserve meeting during a key week for U.S. economic data, while a survey ranked the precious metal as one of the preferred assets for the coming year.

The precious metal has gained up to 0.8% on the second day of its rise. Later on Wednesday, the high-risk earnings report from Nvidia Corp. will be the next test for investors concerned about the astronomical valuations of AI-related stocks.

Gold is trading around $4,090 per ounce despite the decline in global equities, and this trend can occasionally affect the metal through forced liquidation of leveraged positions.

Gold continues to be steadily absorbed by long-term investors and central banks, says Ole Hansen, Head of Commodity Strategy at Saxo Bank A/S. This will “build the foundation” for a new rise in 2026, he adds.

Gold has gained about 55% this year and is still on track to record its best year since 1979, despite the correction from last month’s record high. Support comes from increased central bank purchases and investor demand for hedging against sovereign debt and currency risks.

Compared to major global currencies, global investors expect gold to deliver the second-best returns next year, with only the yen being a better investment, according to a Bank of America survey.

Meanwhile, the longest government shutdown in U.S. history is making it difficult for traders to assess the state of the economy, delaying the release of key data. In this vacuum, expectations for a rate cut have eased this week following comments from several Federal Reserve officials. Currently, interest rate swaps imply about a 50-50 chance of a cut in December, after just two weeks ago nearly ruling out even a quarter-point move.

A key indicator of the U.S. labor market will be published on Thursday, when the Bureau of Labor Statistics releases the employment data for September. Although delayed, these figures will shed light on the state of the world’s largest economy following the six-week shutdown.

Federal Reserve policy will also be in focus when the minutes from the October 28–29 Open Market Committee meeting are released later on Wednesday. They may include indications of when the central bank will start expanding its balance sheet through reserve management purchases. More liquidity in the financial system and a shift toward looser monetary policy will likely favor precious metals.

Source: Bloomberg Terminal