Fed Decision and Middle East Developments Drive Gold's Next Move

Gold prices remain steady as markets assess the latest developments in the Middle East and await the Federal Reserve's policy decision. A weaker US Dollar and lower Treasury yields have supported gold's recent recovery, contributing to its firmer stance.

The temporary pause in military exchanges between the United States and Iran reduced immediate demand for safe-haven assets, while lower oil prices eased inflation concerns. Diplomatic efforts also supported sentiment, with Iranian Foreign Ministry spokesperson Esmail Baghaei stating that mediators are working to prevent further escalation.

Attention has now shifted to the Federal Reserve's policy meeting, where investors expect the central bank to maintain a cautious approach as it balances inflation risks with economic conditions. According to the CME FedWatch Tool, markets have increased expectations for a rate hike compared with levels seen earlier this month, which continues to limit aggressive buying in gold.

The triangle pattern on the gold chart remains a key decision point, with price trading within a large triangle formation. A sustained breakout above the descending trendline would improve the technical outlook and favor a stronger recovery, while a break below the horizontal support would complete the bearish pattern and increase the likelihood of further downside.