Gold prices remained stable during Wednesday’s Asian trading session as investors took a cautious stance ahead of the Federal Reserve’s interest rate announcement later in the day. The metal’s appeal as a safe haven was bolstered by escalating tensions between Israel and Iran, alongside reports of potential direct U.S. military involvement in the region.

Earlier this week, gold gave back much of its recent gains following news of Iran seeking a ceasefire. However, renewed air strikes and stern warnings from U.S. President Donald Trump toward Iran have shifted the mood back to risk aversion.

Spot gold was steady at $3,388.25 per ounce, while August gold futures held firm near $3,405.95 as of 01:56 ET (05:56 GMT).

Middle East Conflict and Weak U.S. Data Support Bullion

The geopolitical climate intensified as Israel and Iran continued aerial confrontations into their sixth day. Reports from the Wall Street Journal suggested that President Trump is contemplating U.S. military strikes on Iran, including its nuclear command infrastructure, demanding “unconditional surrender” from Tehran.

Meanwhile, Reuters noted an increased deployment of U.S. fighter jets and extended stationing of warplanes in the Middle East. Though described by the Pentagon as defensive, these moves have raised concerns over possible U.S. involvement in the conflict.

This backdrop coincided with disappointing U.S. economic figures, including a 0.9% drop in May retail sales, which strengthened expectations for a Federal Reserve rate cut later this year. The Fed’s policy meeting concludes on Wednesday, with markets widely expecting interest rates to remain unchanged but closely watching for revised economic projections.

Given ongoing geopolitical risks and soft U.S. data, gold is expected to maintain its support in the near term.

Metal Prices Gain on Weaker Dollar

Other metals also experienced gains amid a weaker U.S. dollar, making commodities more affordable for overseas buyers. The Dollar Index dipped 0.2% in Asian trading.

Silver futures increased by 0.6% to $37.37 per ounce, while platinum futures rose 0.5% to $1,269.90 per ounce. Copper futures advanced as well, with London Metal Exchange copper up 0.3% to $9,703.75 per ton and U.S. copper futures climbing 0.9% to $4.839 per pound.

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