• Gold remains confined in a multi-day range as traders keenly await the crucial FOMC decision.
• Inflation concerns temper Fed rate cut bets, underpinning the USD and capping the commodity.
• Heightened geopolitical uncertainty continues to act as a tailwind for the safe-haven precious metal.

Gold (XAU/USD) is seen extending its sideways consolidative price move around the $5,000 psychological mark for the third straight day on Wednesday as traders opt to wait for the crucial FOMC decision. The US Federal Reserve (Fed) is expected to maintain the status quo and keep interest rates steady at the end of a two-day meeting. The market focus, however, will be on the accompanying policy statement and updated economic projections, including the so-called dot plot. Moreover, Fed Chair Jerome Powell's comments during the post-meeting press conference will be scrutinized closely for more cues about the path of future interest rates amid fears of a war-driven spike in inflation. This, in turn, will influence the US Dollar (USD) price dynamics and provide a fresh directional impetus to the non-yielding yellow metal.

Meanwhile, the US-Israel attacks on Iran and the effective closure of the Strait of Hormuz – a critical chokepoint handling around 20% of global oil supply – led to severe disruption of energy trade. This has been fueling inflationary concerns and forcing traders to trim their bets for more interest rate cuts by the Fed in 2026. In fact, the current market pricing indicates a significant shift in market expectations from multiple rate reductions to potentially just one in December. This, in turn, assists the USD to stall a two-day-old retracement slide from its highest level since May 2025 and turns out to be a key factor acting as a headwind for the Gold price. However, heightened geopolitical uncertainties continue to benefit traditional safe-haven assets and limit the downside for the precious metal, warranting caution for bears.

Iranian authorities confirmed that top security official, Ali Larijani, and the head of the paramilitary Basij force, Gholamreza Soleimani, were killed in Israeli air strikes on Tuesday. Iran's army chief Amir Hatami said in a statement that Iran’s response to the assassination of the secretary of the Supreme National Security Council will be decisive and regrettable. Meanwhile, the US military targeted sites along Iran’s coastline near the Strait of Hormuz. This, along with the risk of a further escalation of conflicts in the Middle East, could offer some support to the Gold. Meanwhile, policy updates by other major central banks – the European Central Bank (ECB), the Bank of Japan (BoJ), and the Bank of England (BoE) – should produce some trading opportunities around the XAU/USD pair during the latter part of the week.

XAU/USD 4-hour chart

Gold seems vulnerable as break below ascending trend line and 200-SMA on H4 remains in play

The near-term bias is mildly bearish as the precious metal has slipped beneath the 200-period Simple Moving Average (SMA) on the 4-hour chart and the upward-sloping trend line support. The Moving Average Convergence Divergence (MACD) line has turned higher above its Signal line but remains close to the zero mark, suggesting only tentative recovery attempts within a broader softening backdrop. The Relative Strength Index (RSI) near 39 stays below the 50 midline, indicating prevailing bearish pressure despite the recent stabilization.

Immediate resistance emerges at the 200-period SMA around $5,061, and a recovery above this area would be needed to ease downside pressure and expose the recent swing region around $5,100 as the next barrier. On the downside, initial support is located at the recent low near $4,985, with a sustained break opening the way toward the previous reaction area around $4,950. A decisive move below $4,950 would strengthen the bearish extension toward the rising trend line’s prior consolidation band closer to $4,900, while only a firm reclaim of $5,061 and $5,100 would begin to neutralize the current negative tone.

(The technical analysis of this story was written with the help of an AI tool.)

Technical Analysis:

In the 4-hour chart, XAU/USD trades at $5,002.73.