Gold prices rose by $18 after hitting a session low, following an initial drop before the Federal Open Market Committee (FOMC) meeting. Earlier in the session, gold cut a $38 decline down to just $12, showing strong interest from the market. Traders appear eager to buy gold, expecting the Fed to adopt a dovish approach soon. Many believe there will be calls to lower rates soon, no matter the current developments.

Global Factors Influencing Gold Prices

Global issues are impacting the gold market. The ongoing conflict in Ukraine is causing divides between eastern and western regions. At the same time, trade tensions in the US are reversing some benefits of globalization, which brings various risks. These circumstances are making gold seem like a safer choice. Earlier today, gold prices fell to about $2,520 before the FOMC announcement, but that dip was quickly reversed. Prices climbed back near $2,550, indicating strong buyer interest. This rapid recovery shows that buyers are ready to jump in when given a chance. This interest likely comes from the belief that even if the Fed sounds tough now, they face limitations. With increasing political pressure for lower rates and last week’s August CPI data reporting at 3.8%, many believe the Fed will eventually have to shift to avoid a deeper economic downturn. There’s a sense of overlooking any immediate hawkishness from the central bank.

Gold As A Safe Haven Asset

The overall environment continues to support gold as a safe haven. Since the Ukraine conflict started in 2022, geopolitical tensions have only worsened, and recent failures in trade discussions add to the risks. This situation is a key reason why central banks are buying gold as a part of their reserves, with Q2 2025 data showing an addition of 215 tonnes to their official holdings. For traders, this suggests that buying call options on gold futures or related ETFs could be a smart move in the coming weeks. Given the current strength, consider targeting options slightly above the market price with expirations in October or November to take advantage of a likely breakout. Keep in mind that implied volatility is high, making options pricier but also more reactive to significant market shifts. Create your live VT Markets account and start trading now.

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