Gold edges lower as traders assess prospects for Fed rate hike

Published Wed, Jul 29, 2026 · 08:16 AM

[SINGAPORE] Gold edged lower ahead of a finely balanced interest rate decision by the US Federal Reserve due later on Wednesday (Jul 29).

Bullion was near US$4,020 an ounce in early trading, extending a 1.1 per cent decline in the previous session.

Interest rate swaps imply about a one-in-three chance of a quarter-point hike by the Fed, an unusually high degree of uncertainty so close to a decision by the standards of recent years.

Higher borrowing costs are typically a headwind for non-yielding gold.

Policymakers are likely to be torn between June’s tamer-than-expected inflation reading and the more recent rise in oil prices that accompanied a flare-up in fighting between the US and Iran in July.

Crude rebounded on Wednesday after a three-day decline, as tensions persisted across the Middle East.

Four days after the US ended nearly two weeks of airstrikes on Iran, US President Donald Trump welcomed Israeli Prime Minister Benjamin Netanyahu to the White House and sought to lay the ground for further diplomacy.

The US military meanwhile said it had intercepted an “attempted surprise attack” on troops based in the Middle East.

Gold is down by nearly a quarter since the US-Iran war began on Feb 28, with high energy prices stoking inflationary pressures.

However, the metal has held near the key support level of US$4,000 an ounce since late June, bolstered by a wave of dip-buying.

Spot gold fell 0.3 per cent to US$4,018.58 an ounce as at 7.16 am in Singapore. Silver dropped 0.5 per cent to US$56.88 an ounce, having given up more than 2 per cent in the previous session.

Platinum and palladium also traded lower. The Bloomberg Dollar Spot Index, a gauge of the US dollar, was marginally higher after slipping 0.1 per cent on Tuesday. BLOOMBERG