Gold prices stabilized on Wednesday, as investors awaited US inflation data scheduled to be released later in the day, searching for indicators that would help determine the course of the Federal Reserve’s monetary policy, amid discrepancies in the statements of its officials regarding the need to raise interest rates further.
Gold settled in spot transactions at $4,159.45 per ounce by 02:51 GMT, while US gold futures contracts for December delivery rose 0.1 percent to $4,182.60.
Ilya Spivak, head of the global macroeconomics department at Tast Life, said that gold’s movements are still limited within a certain range, but its ability to maintain its stability in conjunction with rising oil prices may indicate its attempt to find a catalyst to continue the rise.
On the geopolitical level, an administrative building belonging to Saudi Aramco in Dhahran was attacked, according to what was announced by the Saudi Ministry of Energy, coinciding with the escalation of confrontations between the Houthis supported by Iran and the Kingdom. The developments pushed oil prices to rise on Wednesday.
Regarding monetary policy, New York Federal Reserve Bank President John Williams reiterated that the central bank may need to raise interest rates again during the current year to reduce inflation. On the other hand, Federal Reserve Board of Governors member Christopher Waller said that the recent rise in US bond yields reflects strong economic growth, not increased inflation expectations, which he described as still stable.
Markets are awaiting the release of the US consumer price index at 12:30 GMT, with producer price and retail sales data to be released on Thursday. Indicators of weak economic momentum may reduce investors' expectations for further interest hikes, which may support gold, according to Spivak.
According to the CME Group's Fed Watch tool, markets are pricing in a probability of about 23 percent of raising US interest rates during the current month, compared to an 88 percent probability of raising them in December.
Gold, which does not generate a return, usually benefits from low interest rates, while high interest increases the attractiveness of yield-generating assets and reduces the attractiveness of the yellow metal.
In other precious metals markets, silver fell 0.6 percent to $59.11 per ounce, platinum settled at $1,664.19, while palladium rose 0.4 percent to $1,130.81.
World Bank Group President Ajay Banga ruled out that the investment boom in artificial intelligence would limit the ability of developing economies to attract private capital, stressing that the opportunities for increasing investment flows are still great, despite reaching record levels.
Banga said, in an interview with “Al Sharq Bloomberg” on the sidelines of the annual meetings of the World Bank and the International Monetary Fund in Bangkok, that the funds available in the private sector far exceed the volume of investments directed to artificial intelligence, ruling out that data centers would constitute a competitor that threatens the financing of developing economies.
The World Bank Group was able to mobilize $112 billion in private capital during the 2026 fiscal year ending in June, compared to about $35 billion in 2022. Banga stressed that the group seeks to increase these flows, stressing the need to develop infrastructure and improve the business environment to attract investors.
He called on the governments of emerging economies, especially in the Middle East and North Africa, to invest in electricity, water, transportation, digital infrastructure, education, and health care, in addition to adopting clear laws and procedures that allow investors to conduct their business in a stable and predictable environment.
He pointed out that the bank issued guarantees worth more than $25 billion in fiscal year 2026, exceeding its annual target of $20 billion by 2030.
However, Banga acknowledged the continued disparity in the distribution of financing, as the private funds mobilized for low-income countries did not exceed about 3 billion dollars, compared to 50 billion dollars for the upper middle-income countries and 37 billion for the lower tier.
He stressed the importance of expanding developing countries' benefit from artificial intelligence in health, agriculture and education, through practical, low-cost applications that take into account their local needs, in parallel with supporting small and medium enterprises and enhancing their ability to access finance and global markets.
The International Monetary Fund has warned that the global economy faces growing risks that threaten growth and financial stability, in light of the war in the Middle East, rising government debt, and the possibility of a decline in the investment boom in artificial intelligence, calling on governments to rebuild their financial margins. Preparing for new shocks.
Despite these risks, the Fund raised its expectations for global economic growth in 2026 to 3.1 percent, compared to 3 percent estimated last July, benefiting from the continued strength of investment in artificial intelligence infrastructure, which helped offset part of the impact of the rise in oil prices resulting from the war. Growth is expected to reach 3.4 percent in 2027, according to the “World Economic Outlook” report issued Tuesday in Bangkok, in conjunction with the annual meetings of the International Monetary Fund and the World Bank Group.
The forecasts are based on the assumption that the Strait of Hormuz will reopen in March 2027, and that shipping traffic will return to pre-war levels by October of the same year. But the continuation of the conflict, and oil remaining at $130 a barrel until the end of the first quarter of 2027, may reduce global growth by 0.2 percentage points in 2026, and 0.5 points in 2027, with global inflation rising to 5.2 percent next year.
Artificial intelligence
Investment in artificial intelligence is one of the most prominent drivers of economic activity, but it raises fears of a sharp correction if the productive returns that companies and markets are betting on are not achieved. The Fund's Director General, Kristalina Georgieva, warned that a large part of the global economy's strength depends on this engine, at a time when cyber risks associated with technology are increasing.
According to the Fund's estimates, a sharp decline in investment in artificial intelligence may lead to a decline in global output by 1.1 percent by 2028, and US output by 1.8 percent. In contrast, accelerated technology adoption could boost global output by an additional 0.6 percent by 2029.
AI-related commerce highlights the scale of this shift; Trade in related goods grew by 29 percent between 2023 and 2025, compared to 8.3 percent for global trade as a whole. The Fund estimates that global trade growth would have been limited to 4.6 percent without this activity.
The Fund’s Director General, Kristalina Georgieva, said during an event of the Bretton Woods Committee that the global economy has become dependent on “one leg, which is artificial intelligence,” warning that the faltering of this engine or disappointment regarding its returns may lead to a more difficult economic environment.
In a separate report on global financial stability, the Fund called on policymakers to avoid complacency in dealing with the possibility of a decline in investments related to artificial intelligence and a decline in stock valuations. He explained that doubts about companies' ability to achieve commercial returns from this technology may reduce the value of equity investments, make debt service more difficult, and weaken expected future revenues.
Uneven growth and widening performance gap
At the geographical level, the prospects for major economies vary. The Fund expects the US economy to grow by 2.3 percent in both 2026 and 2027, while Chinese growth is likely to slow from 4.5 percent to 4 percent. As for India, it is expected to record growth of 7 percent, according to the Fund’s estimates for the period in question.
In an indication of the concentration of global activity, the number of economies that together contribute about 95 percent of global growth decreased to 32 economies, compared to 54 economies in April. This reflects the varying ability of countries to benefit from technical investment and confront energy and financing shocks.
Debts
The Fund warns that the rise in government borrowing narrows the margin of action for the financial authorities, at a time when spending needs related to defense, energy, and economic transformations are increasing. Net borrowing in advanced economies is expected to reach 5.2 percent of GDP in 2026, the highest level since 2021.
In the United States, the fiscal deficit is expected to reach 8.5 percent of output in 2026, compared to 7.1 percent in 2025. Globally, public debt is on track to approach 100 percent of GDP by the end of the decade.
The Fund called on governments to develop reliable plans to control public finances and rebuild reserves that would allow them to confront crises, warning that high borrowing costs may increase pressure on heavily indebted countries. Nigerian Finance Minister Taiwo Oyedele estimates that developing countries pay about $500 billion more to service their debts compared to developed countries.
The Fund believes that the combination of war, debt and technology risks, along with cyber attacks and extreme weather events, makes the global economic outlook more vulnerable to shocks, even as economic activity continues to grow.
