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PRECIOUS-Gold rises on Middle East tensions, but Fed's cautious outlook caps gains
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PRECIOUS-Gold rises on Middle East tensions, but Fed's cautious outlook caps gains
Jun 18, 2025 6:22 PM

June 19 (Reuters) - Gold prices edged higher on

Thursday, supported by safe-haven demand amid uncertainty in the

Middle East, although gains were capped as traders assessed the

U.S. Federal Reserve's signal of a slower pace for future rate

cuts.

FUNDAMENTALS

* Spot gold was up 0.3% at $3,378.86 an ounce, as of

0033 GMT. U.S. gold futures fell 0.4% to $3,395.80.

* Geopolitical tensions remained heightened as U.S.

President Donald Trump on Wednesday refrained from confirming

whether the U.S. would join Israel's bombardment of Iranian

nuclear and missile sites, prompting residents of Tehran to

leave the city amid ongoing air strikes.

* The U.S. military has moved some aircraft and ships from

bases in the Middle East that may be vulnerable to any potential

Iranian attack, two U.S. officials told Reuters on Wednesday.

* The Fed held interest rates steady on Wednesday,

policymakers still forecast slashing rates by half-a-percentage

point this year, but have slowed the pace of future cuts.

* However, Fed Chair Jerome Powell cautioned against putting

too much weight on this outlook, warning of "meaningful"

inflation ahead as higher import tariffs loom.

* Futures on the federal funds rate, which measure the cost

of unsecured overnight loans between banks, raised the odds the

Fed would resume cutting interest rates at the September

meeting, with a roughly 64% probability.

* Signalling continued challenges in the labour market, data

showed the number of Americans filing new applications for

unemployment benefits fell last week, but remained at levels

consistent with a further loss of labour market momentum in June

and softening economic activity.

* The U.S. dollar index traded higher against most

major currencies after the Fed kept interest rates unchanged. A

higher dollar makes greenback-priced bullion more expensive.

* Elsewhere, spot silver was steady at $36.75 per

ounce, platinum rose 1% to $1,335.93, while palladium

gained 0.6% to $1,054.40.

DATA/EVENTS (GMT)

1100 UK BOE Bank Rate June

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