Gold Prices Plummet Ahead of Fed Rate Decision
Global markets are fixated on the Federal Reserve's interest rate decision due at 9:00 PM, which is casting a shadow over gold prices. Spot gold has retreated to $4,010, its lowest level in a week, and is currently trading around $4,032.
The decline comes as Commerzbank lowered its year-end gold target from $4,800 to $4,500, citing aggressive declines and the potential for recovery if inflation is brought under control. Analysts emphasize that despite interest rate risks and inflationary pressures, the main focus for gold investors remains FED policies.
The probability of a rate hike is priced at 30.5%, while the proportion expecting rates to remain steady stands at 69.5%. The sharp decline in oil prices has partly alleviated inflation concerns, but markets remain cautious due to persistent risk of tightening.
Key supports for spot gold include $4,000, which is both a technical and psychological level. A break below this could bring $3,940 into play.