Gold Prices Rise Ahead of Fed Decision

Gold prices climbed during Wednesday's trading session, nearing $3,980 per ounce, recovering from recent declines. This rise coincides with investors turning their attention to the US Federal Reserve meeting, where an interest rate cut is expected later today.

Inflation Boost and Monetary Policy Expectations

Last week's weak US inflation data was a cornerstone in bolstering analysts' expectations of a shift towards monetary easing. Lower interest rates typically weaken the appeal of Treasury bond yields, opening the door for non-yielding assets like gold and silver to regain their luster after a period of decline.

Powell's Imprint and Expectations for Upcoming Meetings

Traders are not only focused on the actual interest rate decision but also on Federal Reserve Chair Jerome Powell's press conference, where they will be looking for clues about the future direction of monetary policy.

Market expectations are currently leaning towards another interest rate cut at the December meeting, further supporting gold.

Trade Agreements and Their Impact on Safe Havens

In parallel, investors have been closely monitoring progress in trade negotiations between the United States and China.

Expectations suggest that Presidents Donald Trump and Xi may sign a framework agreement aimed at freezing US tariff increases in exchange for China easing restrictions on rare earth exports.

Any tangible progress on this front could reduce demand for safe havens like gold.

Continued Gains and a Strong Fundamental Basis

Despite these conflicting factors, gold remains on an upward trajectory for the third consecutive month, registering gains of approximately 50% since the beginning of the year.

This strong performance is based on three main pillars: economic and geopolitical uncertainty, aggressive buying by central banks worldwide, and concerns about the depreciation of major currencies.

Thus, the precious metal remains a prominent feature in investors' portfolios, not only as a traditional safe haven but also as a bet on the continuation of supportive monetary policy environments and escalating fears of a global economic slowdown.