WASHINGTON (dpa-AFX) - Gold inched lower on Wednesday as investors kept a close watch on escalating developments in the Israel-Iran conflict and awaited the Federal Reserve's interest-rate decision later in the day.
Overall losses remained capped as weak U.S. retail sales, housing and industrial output released overnight added to bets the U.S. central bank will cut interest rates at least once more in 2025.
Spot gold dipped 0.2 percent to $3,382.68 per ounce in European trade while U.S. gold futures were down 0.1 percent at $3,402.50.
The dollar slipped as comments from U.S. President Donald Trump raised fears of U.S. involvement in the Israel-Iran conflict.
Trump demanded 'unconditional surrender' from Tehran, warning that U.S. patience was 'wearing thin' and that America held 'complete and total control over Iranian skies'.
In economic news, the Fed's monetary policy announcement will be in the spotlight along with reports on housing starts and weekly jobless claims.
While any movement on interest rates seems improbable, new projections for interest rates and the economy released after the meeting could move markets.
The Bank of England is expected to hold interest rates at 4.25 per cent on Thursday after inflation jumped in April.
Earlier today, Sweden's central bank has cut its key policy rate to 2 percent and said there was a small chance of further easing later this year if economic weakness persists.
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