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Gold holds above $4,000 as Fed decision looms and Middle East tensions rise

XAU/USD is consolidating above $4,000 ahead of the Fed rate decision at 18:00 GMT, with CME FedWatch putting the odds of a 25 basis point hike at about 31%.

Reported · Written up by our desk · Major Pairs

Gold prices are holding above $4,000 despite choppy trading as investors weigh the upcoming Federal Reserve policy decision and worsening tensions in the Middle East. FXStreet said the latest flare-up followed missile launches by Iran’s Islamic Revolutionary Guard Corps at a US base in Jordan, and separate US precision strikes in Iraq targeting Iran-backed groups and US forces and Saudi oil facilities.

FXStreet reported that oil prices reversed after the attacks, ending a three-day sell-off, while the US Dollar Index was near 101.35. The dollar’s strength was linked to expectations for Fed action and the geopolitical risk backdrop.

The Fed will announce its interest rate decision at 18:00 GMT, followed by Chair Kevin Warsh’s press conference at 18:30 GMT. FXStreet noted rates are widely expected to be left unchanged within the 3.5% to 3.75% range, though a hike remains possible given energy driven inflation risks.

CME FedWatch cited by FXStreet showed traders pricing roughly a 31% chance of a 25 basis point increase. The article also said gold may struggle to recover if policymakers maintain a hawkish stance, and it pointed to bearish technical signals including trading below multiple key moving averages and an RSI near 44.

Latest closeGold $4,023.80 ▼1.2%|Dollar index 101.39 ▼0.1%

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