Gold will be retained as traders consider inflation warnings, and risks in the Middle East

(Bloomberg) – Gold has changed little as investors squeezed the rise in geopolitical risks in the Middle East against inflation warnings from the Federal Reserve that increase the likelihood of US interest rate reductions.

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Bullion hovered at nearly $3,369 per ounce as the deal fell in London.

The Fed left the unchanged rate on Wednesday, with policymakers plastering pencils in two cuts by the end of the year. However, Chairman Jerome Powell said he hopes the central bank’s market committee will continue to tackle tariffs on rising prices.

Fed policymakers also released their first new economic forecast since President Donald Trump’s tariffs were in place in April – hopes for a decline in growth rates, increased inflation and reduced jobs in 2025. A significant increase in consumer prices could reduce monetary easing.

It offsets bullion support from the fears of war in the Middle East, and is said to be prepared for the possibility of a strike against Iran in the coming days. Geopolitical tensions and economic uncertainty have boosted gold by almost 30% this year, with robust purchases and inflows into exchange sales funds from central banks.

As of 3:37pm in New York, Spot Gold was unchanged at $3,370.78. Silver fell 1%, but remained its highest since 2012, but palladium also slipped. Platinum fell 1.4%, turning back previous jumps that reached its highest level in over a decade. Metal profits are supported by a surge in demand and an ongoing market deficit.

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