Gold prices rose modestly on Tuesday, rebounding from a three-week low, as easing global trade tensions reduced the metal’s safe haven appeal ahead of a critical U.S. Federal Reserve policy decision.
Spot gold gained 0.4% to reach $3,327.10 per ounce, while gold futures rose by the same margin to $3,381.00 per ounce.
The metal had fallen for four consecutive sessions as progress in trade talks between the United States and the European Union diminished demand for safe-haven assets. The two sides reached a framework trade agreement over the weekend, helping to ease tensions between two of the world’s largest economies and temporarily dampening investor appetite for gold.
Meanwhile, the U.S. dollar index jumped more than 1% on Monday and continued trading in positive territory, making dollar-denominated commodities like gold more expensive for buyers outside the United States.
Despite the recent dip in prices, gold is expected to remain above the $3,000 per ounce level, supported by continued interest in safe-haven assets. A Reuters poll of 40 analysts and traders showed the average gold price forecast for this year at $3,220 per ounce, up from $3,065 in a previous survey three months ago. Expectations for 2026 also rose to $3,400 from $3,000.
While concerns over trade deadlines and financial uncertainty have boosted gold’s allure as a safe haven, most analysts believe central banks remain the primary driver behind gold’s rally, as they aim to diversify their reserves away from long-term reliance on the U.S. dollar.
Investors now await the outcome of the Federal Reserve’s two day meeting, with strong expectations that interest rates will be left unchanged. Markets will closely watch for any signals regarding the Fed’s future monetary policy path.
This anticipation has kept gold trading within a narrow range, as traders remain cautious and avoid taking large positions ahead of the decision. Market participants are also eyeing a series of key U.S. economic data releases later this week, including Q2 GDP figures, the Personal Consumption Expenditures (PCE) Price Index, and monthly jobs reports.
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