Fed Rate Decision Looms Large for Gold Prices

Gold prices remain subdued below $4,350 as traders await the Federal Reserve's interest rate decision. The US Dollar has eased from a two-week high due to profit-taking, supporting gold. However, investors seem hesitant to place aggressive bets ahead of the Fed announcement.

The Fed is expected to raise interest rates by 25 basis points, but market attention will focus on updated economic projections and Chair Kevin Warsh's comments during the press conference. Rising energy-driven inflation risks may lead to further tightening by the Fed, which could impact gold prices.

Escalating Middle East tensions have supported the safe-haven US Dollar, capping gold price gains. The Saudi-led coalition has vowed to respond firmly to missile and drone strikes, raising concerns about supply disruptions in the region.