Fed Decision and Middle East Tensions Keep Gold Prices Range-Bound

Gold prices held steady during early trading on Tuesday as investors balanced expectations for the Federal Reserve's upcoming interest rate decision against escalating geopolitical risks in the Middle East. The precious metal, a traditional safe-haven asset, is caught between competing pressures: the prospect of higher-for-longer US interest rates and rising demand for secure stores of value amid regional instability.

The Federal Reserve's next policy announcement, scheduled for later this week, is the primary driver of near-term gold price action. Markets are widely pricing in a hold on interest rates, but attention is focused on the accompanying statement and Chair Jerome Powell's press conference for signals about the timing of future rate cuts.

Ongoing conflict in the Middle East continues to underpin safe-haven demand for gold, preventing a significant sell-off despite a relatively strong dollar. Analysts note that the situation remains fluid, and any further deterioration could trigger a sharp rally in gold prices as investors seek protection from volatility.