Gold prices remain stuck below $5k as Federal leaves rates unchanged still sees lower rates this year

Gold failed to catch a dovish tailwind after the Fed held rates at 3.50%-3.75% and reiterated a path to lower rates; spot last traded at $4,887.90/oz, down >2% on the day and still capped below the $5,000 handle. The SEP still points to policy easing, with the median projection implying rates at 3.4% by year-end (at least one cut), unchanged from December’s dots. Economists cited in the piece characterize the message as marginally more dovish than expected given sticky inflation, but the Fed offered limited forward guidance and emphasized economic resilience. The statement noted activity “expanding at a solid pace” while flagging Middle East-related uncertainty. Jamie Cox (Harris Financial Group) said the Fed is effectively “choosing to look through the fog of conflict” and is unlikely to “rock the interest rate boat during a supply shock.” The updated projections skew more optimistic on growth while acknowledging higher near-term inflation: 2026 GDP seen at 2.4% (vs 2.3% prior), unemployment 4.4% (unchanged), headline PCE inflation 2.7% in 2026 (vs 2.4% prior) and core PCE 2.7% (vs 2.5% prior), with both easing toward 2% by 2028. For gold, the combination of “higher-for-now” inflation but no extra hawkishness leaves the near-term driver as real-rate/dollar reaction; the immediate >2% drop suggests positioning was leaning dovish and is being unwound. Near-term catalysts are follow-through in rates/dollar post-SEP and subsequent inflation prints that validate (or challenge) the Fed’s disinflation path.