Fed Hold Shifts Focus to PCE Inflation Data Amid Renewed Middle East Tensions
The US dollar index remained stable at around 100.9 after the Federal Reserve's interest rate decision, but this had little impact on gold prices.
Gold initially rallied following the Fed's announcement, but the rally quickly faded as investors digested Chair Kevin Warsh's remarks reiterating the Fed's commitment to returning inflation to its 2% target.
The renewed tensions in the Middle East after the US launched strikes against Iran overnight have kept oil prices elevated, which has reinforced concerns that inflation could remain sticky and complicate the Federal Reserve's path toward easing monetary policy.
Investors are now awaiting Thursday's US Personal Consumption Expenditures price index for fresh clues on the inflation outlook and the likely path of interest rates.