Gold Prices: Anticipation of the Fed Meeting and Key Geopolitical Developments

What Moves the Gold Price at the Present Time?

Markets are closely monitoring geopolitical tensions in the Middle East. Although gold prices have fallen below $3,400 per ounce and Brent crude has dipped below $74 per barrel, price stability below these levels depends on the conflict remaining contained between Iran and Israel.

Any escalation (such as the closure of the Strait of Hormuz or U.S. involvement in current military operations) could significantly impact market sentiment. Such developments would likely drive-up energy prices due to potential supply disruptions and boost demand for safe-haven assets like gold. Conversely, any signs of de-escalation, such as a return to diplomacy or an ease or end of hostilities, could push gold and oil prices lower.

It is worth noting that President Trump had called for the G7 summit to “evacuate Tehran” which could be a strategy to pressure the Iranian government into agreeing to limits on its nuclear program. His abrupt departure from the summit without explanation suggests that all options remain on the table.

In addition to these geopolitical factors, developments in the trade war continue to play a crucial role in shaping gold price trends. If the U.S. and its trading partners reach agreements, the resulting boost to the U.S. economy and the dollar could weigh on gold prices. Conversely, if negotiations fail and the 90-day deadline expires without progress, the Trump administration may proceed with the tariffs announced in early April. This could slow U.S. trade, harm the economy and the dollar, and provide support for gold. President Trump reiterated with his Canadian counterpart a mutual desire to finalize a trade deal within a month and announced a trade agreement with the United Kingdom, although no such deal has been reached with Japan.

What Investors Are Watching at the Upcoming FOMC Meeting?

Markets are awaiting this week’s Federal Reserve meeting, where the U.S. interest rate is widely expected to remain unchanged at 4.5%. The committee will also release updated forecasts for U.S. economic growth, inflation, and unemployment for both the current and upcoming year. Additionally, the Fed’s “dot plot” will reveal policymakers’ projections for short- and long-term interest rates. If the chart signals more rate cuts than currently anticipated by markets (at least two cuts this year), it could support a rise in gold prices—and vice versa.

Investors will also closely follow the press conference by Federal Reserve Chairman Jerome Powell, who is expected to provide further insight into the outlook for U.S. monetary policy and the key factors influencing the committee’s decisions.

Gold Prices Could Rise to $3,900 per Ounce

On June 2, gold broke above the upper boundary of the bullish flag pattern and remained above that level, signaling the potential for a rise to $3,900 per ounce in the short to medium term.

In the near term, prices are fluctuating within the $3,357–$3,500 range. A daily close above the high end of this trading zone would suggest a possible move toward $3,700, although the resistance level of $3,600 should be considered.

Levels to Consider in the Opposite Scenario

A daily close below $3,357 would indicate weakening bullish momentum and may prompt speculative selling, potentially initiating a corrective move toward $3,127. In this case, the $3,250 support level should be monitored closely.

Gold price – Daily Chart

Chart Source: ADSS Platform