Onome Amuge
Gold eased on Wednesday as investors took profits ahead of a widely expected US Federal Reserve interest rate cut, tempering a rally that has pushed the metal to repeated highs this year. Spot gold slipped 0.3 per cent to $4,196.15 an ounce, while March futures fell by the same margin to $4,224.30.
The pullback comes despite bullion remaining historically elevated, supported in recent weeks by rising conviction that the Fed is poised to loosen policy more aggressively over the coming quarters. Lower interest rates tend to boost the appeal of non-yielding assets such as gold by reducing the opportunity cost of holding them.
The US central bank is expected to lower the federal funds rate by 25 basis points at the close of its two-day meeting later on Wednesday. Market attention, however, is fixed less on the size of the cut than on updated guidance from policymakers, amid lingering concerns that inflation and a series of mixed data releases could prompt a more cautious tone. Analysts say any indication that the Fed sees a slower disinflation path could limit further upside for gold in the near term.
Investors are also watching developments around the Fed’s leadership. President Donald Trump is preparing to begin his final round of interviews for a successor to Jerome Powell, whose term expires in May 2026. Kevin Hassett, the White House economic adviser viewed as the leading candidate, said at the WSJ CEO Council on Tuesday that there was plenty of room for additional rate cuts, while cautioning that a renewed rise in inflation would alter the policy calculus. His comments injected an additional layer of uncertainty into the rate outlook as markets gauge how a new chair might influence the Fed’s reaction function.
In other metals, spot platinum dropped 2 per cent to $1,674.70 an ounce after briefly touching a near two-week high earlier in the session. The move underscored the volatility that has characterised trading in the metal in recent weeks as investors weigh signs of tightening supply against muted industrial demand.
Benchmark copper futures on the London Metal Exchange rose 1.4 per cent to $11,627 a tonne, extending gains linked to expectations of improving global manufacturing activity and continued tightness in physical markets.
Silver, meanwhile, has emerged as the standout performer across precious metals. The metal hit $62.018 an ounce earlier on Wednesday, capping a rise of more than 100 per cent since the start of 2025. The rally has been fuelled by a potent mix of speculative flows and structural factors, including forecasts of shrinking supply and accelerating demand from industrial users.
