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Gold steadies above $4,000 as traders refocus on Fed vote split

While markets widely expect the Fed to keep the federal funds target range at 3.50% to 3.75%, investors are likely to focus on how individual FOMC members vote and what that implies for September.

Reported · Written up by our desk · Central Banks

Gold has shifted into a narrow trading range above $4,000 as geopolitical pressure eases, with attention turning back to the Federal Reserve rather than the headline rate decision, according to Action Forex. The outlet links the change to a rapid cooling in Middle East risk, including a sharp drop in Brent crude after the suspension of military strikes between the United States and Iran over the weekend.

Action Forex says Brent’s fall toward the $80 area has reduced fears that energy prices will drive another meaningful inflation shock. It also notes that even reports suggesting attacks resumed have not been enough to sustain oil gains beyond about $85, leaving gold and the US dollar without the clear directional impulses that dominated trading last week.

In this context, Action Forex points to the FOMC meeting as the next major catalyst for markets. The outlet says the rate decision itself is not expected to surprise, with markets overwhelmingly expecting the Fed to leave the federal funds target range unchanged at 3.50% to 3.75%.

Instead of expecting major changes from Chair Kevin Warsh’s guidance approach, Action Forex says investors are likely to judge the meeting by the distribution of votes. It adds that Fed funds futures currently imply about a 79.0% probability of a September rate hike.

Latest closeGold $4,023.80 ▼1.2%|WTI crude $81.23 ▼1.7%|Brent $85.92 ▼2.8%

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