Gold extends gains ahead of Fed rate decision

Gold prices ended in the green today, July 26, with markets awaiting the monetary policy decision by the Federal Open Market Committee (FOMC), which will be followed by a speech by Fed Chairman Jerome Powell.

The yellow metal’s prices extended their gains on the decline in the US dollar index, amid expectations that the US central bank will lift interest rates for the last time this year after inflation slowed to 3% last June — equivalent to a third of what it was a year ago.

JPMorgan Chase & Co. sees gold prices pushing past $2,000 an ounce by year-end, hitting a fresh record of $2,175 per ounce in the final quarter of 2024, with risks skewed to the upside on a forecast for a mild US recession that is likely to hit sometime before the Fed starts easing, Bloomberg reported.

According to the CME FedWatch Tool, markets are highly anticipating the FOMC, during its meeting today, to decide on a 25-basis-point interest rate hike, bringing the monetary policy range to 5.25-5.50%, with a slight dip in forecasts for stabilization thereafter at the remaining three meetings slated for this year.

Investors are awaiting comments from Powell on the FOMC’s policy decision later today, looking for more clues about the course of monetary policy in the US.

In terms of trading, bullion for August delivery rose 0.30%, or $6.40, to finish at $1,970.10 an ounce.

Meanwhile, the US dollar index, which measures the performance of the US currency against a basket of six major currencies, inched 0.10% lower to stand at 101.25 points at 08:22 pm Makkah time.