Gold’s muted behavior reflects a market caught between diverging forces. Modest safe-haven flows, triggered by global growth concerns and geopolitical unease, are offering support.
Simultaneously, the U.S. dollar’s pullback, following a strong July, has marginally eased pressure on the non-yielding asset. However, the overarching narrative remains one of caution.
Silver mirrored gold’s tone, drifting sideways as traders weighed prospects for Fed policy shifts.
The metal, often more sensitive to industrial demand, is also responding to broader market signals, including marginally softer U.S. yields and subdued risk appetite.
FOMC Decision Looms as Market Prices in Policy Hold
According to CME FedWatch Tool projections, markets assign a 97% probability that the Federal Reserve will keep rates steady. However, attention is firmly on the language of the policy statement and Chair Jerome Powell’s press conference. Traders are primarily focused on any forward guidance suggesting a potential shift toward easing by September.
Despite recent signs of economic cooling, such as Tuesday’s Job Openings and Labor Turnover Survey (JOLTS), which showed job openings fell to 7.43 million from 7.71 million in May, the Fed may still strike a hawkish tone. Persistent inflation concerns, partially fueled by rising tariffs and sticky service prices, leave room for caution.