Gold Stalls as Investors Brace for Fed Policy Shift

The yellow metal closed the week at $4,051.51 per ounce, failing to sustain a midweek rally that briefly pushed prices to $4,165.71. Market participants are currently caught in a tug-of-war: safe-haven demand, fueled by heightened tensions between the U.S. and Iran and volatile energy costs, is being offset by expectations of a hawkish central bank. Strong U.S. labor data, highlighted by a drop in initial jobless claims to 187,000, has reinforced the narrative that the Fed may maintain restrictive policies to ensure price stability, keeping pressure on non-yielding assets.

Sentiment remains starkly divided between institutional and retail participants. The latest Kitco News survey shows Wall Street analysts largely bearish or sidelined, citing technical exhaustion and the lack of a clear catalyst for growth. In contrast, Main Street investors are leaning bullish, viewing the repeated defense of the $4,000 floor as a sign of underlying resilience. With the Federal Open Market Committee meeting scheduled for next week, market volume has thinned as traders adopt a risk-off posture, preferring to wait for concrete policy guidance before committing to new positions.