Gold prices held steady on Wednesday as investors digested the Federal Reserve’s latest meeting minutes, which offered little clarity on the future path of interest rates. The precious metal remained range-bound as traders evaluated whether the central bank would maintain its hawkish stance or consider policy easing later in the year.
The FOMC minutes showed officials remain cautious about inflation risks, signaling that rate cuts may not be imminent. While some policymakers acknowledged progress in cooling inflation, they also emphasized the need for further evidence before shifting policy. This kept gold prices supported, as uncertainty around monetary policy tends to boost demand for the safe-haven asset.
A stronger U.S. dollar and Treasury yields limited gold’s upside, as investors sought clarity on the Fed’s long-term strategy. The greenback edged higher following the minutes, reflecting expectations that the Fed will keep borrowing costs elevated for an extended period. Higher yields typically make non-yielding assets like gold less attractive, capping further gains.
XAU/USD 1-D Chart as of February 19, 2025 (Source: TradingView)
Despite these headwinds, gold remains resilient amid global economic concerns and geopolitical risks. Persistent inflation fears and lingering uncertainty over central bank policies continue to underpin demand, as investors look for protection against market volatility. Central bank purchases have also contributed to gold’s stability in recent months.
Looking ahead, traders will focus on upcoming economic data releases, including U.S. inflation figures, which could influence expectations on Fed policy moves. Any signs of slowing inflation could fuel speculation of rate cuts, providing fresh momentum for gold. Conversely, stronger-than-expected data may reinforce the Fed’s cautious stance, keeping pressure on the metal.
For now, gold prices are likely to trade within a tight range as markets await further signals from policymakers. With investors closely monitoring macroeconomic trends, gold’s next move will largely depend on shifts in rate expectations and broader risk sentiment in the weeks ahead.
