US Federal Reserve Meeting: Gold and silver prices eased slightly on Tuesday ahead of two major global events: the outcome of the US Federal Reserve’s policy meeting and crucial trade talks between the US and China. Gold hovered near the $3,400/oz mark on Comex, with investors awaiting clear signals on the path of interest rates and macroeconomic stability.
The Federal Reserve is widely expected to keep interest rates unchanged when it announces its decision tonight at 11:30 PM IST. Market participants will closely watch Fed Chair Jerome Powell’s post-meeting press conference and the FOMC statement for hints on future rate cuts. The CME FedWatch tool currently indicates a strong probability of a rate pause, but the market remains alert for any dovish shift in tone.
Meanwhile, China has moved to inject more liquidity into its financial system. At a press briefing, People’s Bank of China Governor Pan Gongsheng announced a 10 basis point cut in the seven-day reverse repo rate—from 1.5% to 1.4%—and a 50 basis point reduction in the reserve requirement ratio (RRR). The measures aim to stabilize growth ahead of this week’s trade dialogue with the United States in Switzerland.
These discussions, seen as a potential turning point in resolving the long-standing trade conflict ignited under President Donald Trump, will involve U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer meeting their Chinese counterparts.
In the background, central banks continue to accumulate gold. The People’s Bank of China added another 2 tonnes to its reserves in April—its sixth straight month of buying—bringing its total holdings to 2,294 tonnes. Similarly, the National Bank of Poland raised its reserves by 12 tonnes last month, taking its 2024 tally to 61 tonnes.
Despite near-term softness, Goldman Sachs remains bullish on gold. In its latest forecast, the bank maintained its base-case year-end 2025 target of $3,700/oz. In the event of a U.S. recession or financial stress, Goldman sees gold prices climbing to $3,880—and even reaching $4,500 under extreme risk scenarios.
Tensions in South Asia also add to the geopolitical uncertainty. India launched ‘Operation Sindoor’ targeting terror camps across the border in Pakistan, further supporting gold’s risk-hedge appeal.
Big Events of the Week
Monday, May 5, 2025
07:15 PM (US) – S&P Global Services PMI Final (April)
07:30 PM (US) – ISM Services PMI (April)
Tuesday, May 6, 2025
06:00 PM (US) – Balance of Trade (March)
06:00 PM (US) – Exports & Imports Data
Wednesday, May 7, 2025
11:30 PM (US) – Federal Reserve Interest Rate Decision
12:00 AM – Fed Press Conference
Thursday, May 8, 2025
05:20 AM (Japan) – BoJ Monetary Policy Meeting Minutes
04:30 PM (UK) – Bank of England Interest Rate Decision
06:00 PM (US) – Initial Jobless Claims
06:00 PM (US) – Nonfarm Productivity QoQ Preliminary (Q1)
08:30 PM (US) – Consumer Inflation Expectations (April)
Friday, May 9, 2025
04:15 PM (US) – Speech: Fed Governor Barr
06:00 PM (US) – Speech: Fed Governor Kugler
07:30 PM (US) – Speech: Fed President Goolsbee
Saturday, May 10, 2025
07:00 AM (China) – Inflation Rate YoY (April)
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