Gold prices maintained stability around the $2,380 per troy ounce mark on Wednesday, remaining close to record levels as traders exercised caution ahead of potential developments in the aftermath of Iran’s air strike on Israel. Reports from Reuters indicated a delay in Israel’s war cabinet meeting, originally scheduled for Tuesday to address Iran’s unprecedented direct attack, now rescheduled for Wednesday.
Sources cited by The Jerusalem Post revealed that Israel has reportedly finalized plans for a retaliatory strike against Iran. In addition, late on Tuesday, US National Security Advisor Jake Sullivan announced forthcoming sanctions targeting Iran, as well as entities supporting the Islamic Revolutionary Guard Corps and Iran’s Defense Ministry.
Meanwhile, Federal Reserve (Fed) Chairman Jerome Powell, speaking at the Wilson Center in Washington, tempered expectations for potential rate cuts. Powell emphasized the strength of the US economy and highlighted recent data indicating limited progress on inflation this year. He underscored the prolonged timeline for achieving the 2% inflation target, which could dampen the appeal of non-yielding assets such as gold amidst prospects of higher interest rates.
According to the CME FedWatch Tool, the likelihood of interest rates remaining unchanged in the upcoming June meeting has increased to 84.8% from Monday’s 78.7%. Investors will closely monitor speeches from Federal Reserve officials throughout the week, along with Thursday’s US Initial Jobless Claims data, for further insights into the trajectory of monetary policy.
