Spot Gold was holding near the $3,350 mark on Thursday, after the Federal Reserve flagged two potential interest rate cuts by the end of 2025 and as the Israel-Iran conflict has now entered its seventh day, supporting safe-haven demand.
Iran’s Supreme Leader rejected US President Trump’s call for unconditional surrender, which triggered mass evacuations from Tehran amid more intense airstrikes by Israel.
Israel’s armed forces were reported to have struck over 20 targets in and around Tehran, including sites connected to Iran’s nuclear weapons development.
Media reports also stated that the US was considering taking part in Israel’s bombardment of Iran’s nuclear facilities – a move which could lead to a broader regional conflict.
On the monetary front, the Fed kept its federal funds rate target range without change at 4.25%-4.50% at its June meeting, in line with market consensus.
Fed policy makers have taken a cautious stance to fully evaluate the economic impact of the Trump administration’s policies concerning tariffs, immigration and taxation.
The central bank highlighted that uncertainty over the economic outlook had diminished, but was still elevated.
The Federal Reserve still projects two interest rate cuts this year, despite slowing growth and persistent inflation pressures.
The US central bank revised down its 2025 GDP growth forecast to 1.4% from 1.7% in the March projection. And, the 2026 forecast was revised down to 1.6% from 1.8% previously.
Additionally, annual core PCE inflation forecasts were revised up, as follows:
– for 2025 – to 3.0% from 2.7%;
– for 2026 – to 2.4% from 2.2%;
– for 2027 – to 2.1% from 2.0%.
In the meantime, a World Gold Council survey showed that 95% of central banks projected global gold reserves to increase over the upcoming 12 months.
Spot Gold was last down 0.35% on the day to trade at $3,357.44 per troy ounce.
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