Gold holds cautious tone before fed

July 07, 2026 (MLN): Gold prices edged lower on Tuesday, pulling back from a two-week peak as investors adopted a cautious stance ahead of the release of the U.S. Federal Reserve's June policy meeting minutes, which are expected to provide fresh insight into the central bank's interest rate outlook under Chair Kevin Warsh.

Currently, spot gold is up 0.68% to $4,145.74 an ounce as of [04:44 pm] PST, according to data reported by Mettis Global.

Market participants are closely watching the minutes from the Federal Open Market Committee (FOMC) meeting held on June 16-17, scheduled for release on Wednesday.

The document is expected to offer greater clarity on how policymakers view inflation, economic growth, and the future path of monetary policy.

According to Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery, gold is currently consolidating after recent gains, with traders waiting for signals from the Fed before taking fresh positions.

He noted that the precious metal appears to be establishing a support level as markets assess the central bank's near-term policy direction, according to CNBC.

Warsh's first policy meeting as Federal Reserve chair marked a notable shift in communication, with officials removing explicit guidance on potential future rate moves.

The change was aimed at giving the central bank greater flexibility to respond to evolving economic conditions rather than committing to a predefined policy path.

However, Fed Governor Christopher Waller expressed a different perspective on Monday, arguing that forward guidance can remain an effective policy tool when used appropriately, as it helps financial markets adjust more quickly to changes in monetary policy.

Gold has fallen more than 25% from the record highs reached earlier this year, when heightened tensions involving the United States, Israel, and Iran fueled inflation concerns, strengthened the U.S. dollar, and increased expectations that the Fed would keep interest rates elevated.

Despite the broader decline, bullion climbed to a two-week high on Monday after easing geopolitical tensions helped improve investor sentiment.

In addition, weaker-than-expected U.S. employment data released last week prompted markets to scale back expectations for near-term monetary tightening.

Traders currently assign roughly a 56% probability to a Federal Reserve interest rate increase in September, down from more than 60% before the latest labor market data, according to the CME FedWatch Tool.

Lower interest rates generally support gold prices because the precious metal does not generate interest income, making it more attractive relative to yield-bearing assets when borrowing costs decline.

Separately, Hong Kong strengthened its position in the global precious metals market by launching a central gold clearing system on Tuesday while also resuming gold futures trading, part of a broader strategy to establish itself as a regional hub for gold reserves and trading.

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