On June 16th, COMEX gold prices experienced volatile trading at elevated levels, ultimately settling at $4,353.0 per ounce, marking a slight increase of 0.03%. In domestic markets, the overnight SHFE gold contract opened higher but lacked the momentum to sustain further gains, closing at 944.76 yuan per gram, a minor decline of 0.06%.

The Bank of Japan recently announced a 25 basis point increase in its benchmark interest rate to 1%, reaching its highest level since 1995. It also declared plans to suspend the reduction of its government bond purchase program starting in April 2027. As this rate hike was largely anticipated by the market, the financial reaction was muted, resulting in a limited impact on gold prices.

Geopolitically, media reports suggest the US and Iran are set to sign an agreement on the 19th, which would lead to the full reopening of the Strait of Hormuz. Former President Trump indicated that the US would subsequently shift its focus to the Russia-Ukraine conflict. The breakthrough in US-Iran negotiations warrants attention regarding future Strait of Hormuz navigation. For gold, the decline in oil prices and a corresponding fall in inflation expectations may lead the Federal Reserve to adopt a less aggressive, hawkish policy stance, which is viewed as a relatively optimistic development.

Market Focus on the Federal Reserve

Market attention over the next two days is likely to center on the Federal Reserve's June FOMC policy decision. As this meeting marks a debut for a key official, the market is particularly interested in potential adjustments to the "dot plot" and the new chair's commentary. While this could introduce volatility in the gold market, given that much of this information has already been priced in, the outlook is not pessimistic. The short-term focus will be on whether gold prices can sustain their rebound, thereby injecting greater confidence into the market.