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Gold slips below $4,050 ahead of two-day FOMC meeting
XAU/USD is down 0.85% for the day, while traders have trimmed Fed rate-hike bets heading into the Wednesday decision.
Gold is holding an offered tone in Asian trading, trading just below $4,050 and down 0.85% on the day, after failing to sustain acceptance above the $4,100 level. FXStreet attributes the bias to a weaker outlook for bullion, noting that the US dollar’s relative calm could limit downside, even as investors position for the next catalyst.
FXStreet says the focus is on the Fed’s upcoming two-day policy meeting, with expectations for the US central bank’s future path seen as key for driving USD demand. Traders have reportedly pared back Fed rate-hike bets amid renewed hopes for US-Iran diplomacy, which helped cool inflation fears.
The dollar and energy-market developments are also feeding into the backdrop for gold, according to FXStreet, which links investor caution to recent developments in the Middle East. It cites a pause in US bombing against Iran after about two weeks of strikes, plus comments from President Donald Trump about potential progress on talks, while also noting warnings that strikes could resume if negotiations fail.
Still, FXStreet points to lingering risk signals, including reports of drone attacks involving Saudi Arabia, Jordan, and Iraq, and concerns about supply disruptions tied to the Bab el-Mandeb and Red Sea security after Houthis announced a maritime blockade against Saudi Arabia and attacked oil installations. With the safe-haven USD supported by these risks, FXStreet says traders may wait for stronger follow-through, particularly a move toward and below the $4,000 psychological level, before placing new bearish bets.
Latest closeGold $4,078.90 ▲0.3%