Gold prices edged moderately higher while silver prices saw a slight dip in early U.S. trading on Wednesday. As investors await the conclusion of the U.S. Federal Reserve’s highly anticipated meeting this afternoon, trading is expected to become more volatile. December gold was up $10.60, trading at $2,603.00, while December silver fell by $0.034 to $30.945.
The focus today is on the Federal Reserve Open Market Committee (FOMC) meeting, which concludes with a statement, a press conference by Fed Chair Jerome Powell, and the release of the Fed’s “dot plots” that outline future rate projections. Market expectations have shifted slightly toward a more aggressive 0.5% rate cut, compared to an earlier consensus of a 0.25% reduction. This would mark the Fed’s first interest rate cut in 4.5 years. The uncertainty surrounding the decision could lead to significant market swings following the 2:00 p.m. EDT announcement. Meanwhile, the Bank of England and the Bank of Japan are set to hold their monetary policy meetings on Thursday.
Overnight, stock markets in Asia and Europe showed mixed results, while U.S. stock indexes are expected to open slightly higher when trading begins in New York.
In geopolitical news, tensions in the Middle East escalated mid-week after the coordinated explosion of thousands of pagers used by Hezbollah militia members, including one belonging to an Iranian official. The attacks reportedly resulted in 2,750 injuries and at least nine fatalities. Israel has been widely blamed for orchestrating the attack, likely provoking a military response from Hezbollah.
In other key markets, the U.S. dollar index weakened slightly, while crude oil prices on the Nymex dropped to $70.25 per barrel. The 10-year U.S. Treasury note yield also declined, now standing at 3.65%.
Other notable U.S. economic reports scheduled for release today include the weekly MBA mortgage applications survey, new residential construction data, and the weekly DOE energy stocks report.
