Gold Prices Soar as Fed Hike Bets Fall, Eyes Turn to June PCE Report

Gold prices rebounded on Thursday after investors reduced bets on an immediate tightening cycle following the Federal Reserve's decision to keep interest rates unchanged. The Fed voted 9-3 to maintain the target range at 3.5% to 3.75%, with three policymakers favoring a quarter-point increase. Gold typically struggles when real yields rise, but a reduction in near-term tightening expectations can support the metal even when policymakers maintain a hawkish inflation message.

Gold spot prices rose 0.3% to $4,076.29 an ounce by 0245 GMT after climbing as much as 2% on Wednesday. August US futures gained 1% to $4,073.60. CME FedWatch pricing showed the probability of a September increase had fallen to about 63% from roughly 81% before the decision.

The next catalyst for gold is the June Personal Consumption Expenditures report, due on Thursday. A softer print could keep rate expectations down, weaken the dollar, and support a push toward $4,500. However, a firmer-than-expected inflation reading could rebuild September hike bets, lift Treasury yields, and strengthen the dollar.