Gold Rises Globally and Locally Ahead of the U.S. Federal Reserve Decision Amid Expectations of a Rate Cut

Gold prices climbed in both local and international markets during Wednesday’s trading session, as traders maintained a cautious tone ahead of the U.S. Federal Reserve’s interest rate decision. Markets broadly expect the central bank to announce a second consecutive rate cut of 25 basis points.

This comes at a time when optimism is building over the prospect of a breakthrough in U.S.–China trade relations, ahead of the anticipated meeting between President Donald Trump and President Xi Jinping on Thursday during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, according to a report issued by “iSagha”, a platform specializing in gold and jewelry trading.

Noticeable Local and Global Gains

According to Saeed Embabi, CEO of the platform, domestic gold prices rose by EGP 75 during the day, with 21-carat gold reaching EGP 5,400 per gram, while the global ounce increased by $60 to $4,020.

The report also showed that 24-carat gold recorded EGP 6,171, 18-carat stood at EGP 4,629, while 14-carat stabilized at EGP 3,600, and the gold pound reached EGP 43,200.

On Tuesday, prices had fallen by about EGP 55, as the 21-carat gram began the week at EGP 5,380 and closed at EGP 5,325, while the global ounce dropped $29, closing at $3,960 per ounce.

Gold Reclaims the $4,000 Level

Globally, gold experienced a modest rebound on Wednesday after three consecutive losing sessions, regaining the $4,000 per ounce level after briefly dipping to a three-week low near $3,886.

This rebound was attributed to investors returning to safe-haven assets ahead of the Federal Reserve’s policy statement.

Markets expect the Fed to lower rates to a range of 3.75%–4.00%, while traders eagerly await remarks from Fed Chair Jerome Powell, which could set the tone for future monetary policy.

Any signal of an extended easing cycle could stimulate further demand for gold, whereas a more cautious tone might limit upside momentum.

Dollar and Bond Yields Edge Higher

The U.S. Dollar Index rose to 98.88 points, ending a two-day losing streak, while the 10-year Treasury yield increased by 1.6 basis points to 3.993%, amid limited economic data due to the ongoing U.S. government shutdown.

Meanwhile, ADP announced it would begin issuing weekly preliminary employment estimates, with its first release showing that private-sector employers added about 14,250 jobs per week during the four weeks ending October 11.

Last week’s delayed Consumer Price Index (CPI) report showed headline inflation rising 0.3% month-over-month in September — below expectations of 0.4% — bolstering expectations for additional monetary easing.

Fed Policy Backdrop and Challenges

At its September meeting, the Federal Reserve signaled that economic activity had slowed in the first half of the year, with softer job growth and a slight uptick in unemployment, while inflation remained above target.

Fed Governor Steven Miran was the lone dissenter, advocating for a deeper 50-basis-point cut, and is expected to reiterate that stance at today’s meeting.

Gold at the Heart of Geopolitical Balances

Geopolitical focus is turning to the Trump–Xi meeting at the APEC Summit, with hopes for a balanced trade deal between Washington and Beijing.

Trump said Wednesday, “President Xi will be here tomorrow, and I hope we reach a good deal for both sides,” fueling market optimism.

London Forecasts: Gold Could Test $5,000 an Ounce

In the medium term, sentiment at the London Bullion Market Association (LBMA) Precious Metals Conference 2025 turned notably bullish, with traders expecting gold to test support near $5,000 per ounce by next year.

A conference survey showed delegates predicting gold prices to reach $4,980.30 per ounce, a 25% increase from current levels, despite the recent drop below $4,000 after a sell-off that followed record highs above $4,360.

Strong Performance in Precious Metals

Gold is on track for its best annual performance since 1979, up more than 50% year-to-date. However, platinum and silver have outperformed: silver is trading at $47.14 an ounce (up 61% YTD), while platinum stands at $1,591 an ounce (up 93% YTD).

The LBMA survey revealed that 40% of delegates expect gold to remain the top-performing asset through 2026, while 30% favor platinum and 21% silver as next year’s leaders.

Central Banks Continue Buying Despite Slower Pace

Although central bank gold demand has moderated in recent months following sharp price increases, official sector purchases remain a key market driver.

The Bank of Korea signaled renewed interest in boosting gold reserves after halting purchases since 2013, according to Hyung Sun Jung, Director of Reserve Management at the bank.

He stated: “We’re monitoring global market conditions to determine the right timing to resume gold buying as a long-term hedge.”

Similarly, Madagascar’s Central Bank Governor, Ivo Andrianarivelo, told Bloomberg that the country plans to quadruple its gold reserves to four tons from the current one ton.

According to the World Gold Council, central banks purchased 415 tons of gold in H1 2025, down from 525 tons in the same period of 2024 but still well above long-term averages. Analysts forecast total purchases of around 900 tons for the year.

Outlook for the Year Ahead

The World Gold Council’s annual central bank survey showed that 43% of respondents plan to increase their gold holdings this year, up from 29% last year, while 95% expect global reserves to grow over the next twelve months.

Although prices briefly slipped below $4,000 per ounce, analysts agree that gold remains fundamentally supported in the long run, driven by sustained central bank demand and robust retail investment, reaffirming the yellow metal’s status as a safe-haven asset amid global economic and geopolitical uncertainty.