WASHINGTON (dpa-AFX) - After moving sharply lower over the past few sessions, the price of gold regained some ground during trading on Wednesday.
Gold for October delivery gave back ground after an early surge but still ended the day up by $17.50 or 0.4 percent at $3,983.70 an ounce.
The rebound came as some traders looked to pick up gold at reduced levels following the recent slump, which dragged the price of the precious metal down to its lowest levels in over two weeks.
'Many of the fundamental drivers behind the bull market in gold still stand,' said Danni Hewson, head of financial analysis at AJ Bell. 'Geopolitical tensions are likely to underpin demand with central bank buying, the dollar still looks under threat from US presidential policy, and the Fed looks set to cut rates.'
She added, 'However, while gold is seen as a safe haven, it is volatile, and it's possible to lose your shirt in the downdrafts.'
Gold also benefitted from optimism about the outlook for interest rates ahead of the Federal Reserve's monetary policy announcement.
With the Fed widely expected to lower interest rates by another quarter point, traders will be looking to the accompanying statement as well as Fed Chair Jerome Powell's post-meeting comments for clues about the likelihood of further rate cuts.
CME Group's FedWatch Tool is currently indicating an 85.4 percent chance the Fed will lower rates by another quarter point in December, but the views about the chances of further rate cuts in early 2026 are more mixed.
On the U.S. economic front, the National Association of Realtors released a report showing pending home sales unexpectedly came in flat in the month of September.
NAR said its pending homes sales index was unchanged at 74.8 in September after surging by 4.2 percent in August. Economists had expected pending home sales to jump by 1.0 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
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