Today’s markets analysis on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade
Gold prices edged higher on Wednesday amid fiscal concerns and as investor focus shifted to upcoming US economic data and Federal Reserve guidance. With the US dollar holding steady, gold’s upside was supported by concerns over sovereign bond markets.
Japan’s weak 40-year bond auction, following a similarly poor US 20-year sale, highlights growing discomfort with long-term fiscal trajectories. The resulting pressure on term premiums may continue to bolster demand for gold as a store of value.
Beyond fiscal concerns, geopolitical tensions also contribute to gold’s resilience. In Eastern Europe, tensions remain elevated. Meanwhile, in the Middle East, persistent instability could increase safe-haven demand and lend support to gold prices.
However, the market could remain cautious as market participants await today’s Fed minutes. Dovish signals from the central bank could accelerate inflows into the bullion, while any hawkish tone may boost US yields and weigh on gold.
Furthermore, cautious remarks from Minneapolis Fed President Neel Kashkari and New York Fed President John Williams have reinforced expectations that interest rates may remain steady for longer. Both policymakers emphasized the uncertainty surrounding tariff-induced inflation, advocating a measured approach to monetary easing.
