| “Gold fell to a one-month low as markets turned more cautious ahead of today’s Federal Reserve decision and Chair Jerome Powell’s remarks alongside updated economic projections. While a hold in rates is widely expected, uncertainty around the medium-term policy path remains elevated, especially as energy-driven inflation risks have re-entered the narrative.
Recent signals have been mixed. Some growth and labor indicators have softened, while inflation remains a key constraint—and may not yet fully capture the latest oil-price shock. A less dovish message from the Fed could keep U.S. yields and the dollar supported, weighing on non-yielding assets such as gold. Conversely, a more dovish tilt could help stabilize sentiment and support a rebound in the metal. In parallel, Latin American currencies such as the Brazilian real and Mexican peso remain sensitive to shifts in U.S. rates expectations and global risk appetite. A softer Fed tone can be supportive for higher-yielding EM FX when risk sentiment is stable, while persistent U.S. rate support and elevated volatility can create headwinds.”
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