The gold price is expected to be minimally positive ahead of the Federal Reserve‘s Open Market Committee meeting. The yellow metal had previously come under pressure due to a stronger US dollar.
The central bankers begin their meeting today, which will conclude on Wednesday with a statement and press conference by Fed Chair Jerome Powell. The market generally expects the Fed to keep the key interest rate unchanged this week. However, many observers believe that Powell, under pressure from US President Trump, might at least hint that the Fed could lean towards a looser monetary policy in the fall.
The new trade deal between the US and Europe has also caused the US Dollar Index to rise to new heights, while the Euro fell towards $1.15. Evidently, the foreign exchange markets believe that the agreement is more advantageous for the US than for the EU. In any case, the Euro continued to fall after yesterday’s 1.3% decline on Monday, its strongest drop in two months, reaching its lowest level since the end of June. This increases the cost of holding gold for investors, which negatively impacts its price.
Analysts See Gold at $4,000 per Ounce by End of 2026
According to analysts, the gold price could still reach the $4,000 per ounce mark by the end of 2026. Experts from Fidelity International attribute this, according to a Kitco report, to the Fed eventually cutting interest rates and central banks globally continuing to increase their gold reserves.
Analysts see a clear chance that the Federal Reserve will eventually pursue a looser monetary policy and the US dollar will weaken accordingly. The attractiveness of the yellow metal will continue to be enhanced by rising national debts, and gold is not yet overvalued in the context of its rally.
