Gold Consolidates Near $4,100 as Investors Eye Fed Meeting

Gold (XAU/USD) is consolidating gains near $4,100 as investors remain cautious ahead of the US Federal Reserve's monetary policy meeting on Wednesday. The precious metal has been forming a descending triangle in progress, with technical indicators hinting at a consolidation rather than an impulsive bullish reversal.

The pause in US-Iran hostilities and the moderate improvement in risk sentiment have boosted hopes for peace talks and sent oil prices lower by around $10 from last week's peak. However, precious metals' rallies remain subdued so far with investors looking on from the sidelines.

Futures markets are pricing a 33% chance of a Fed rate hike on Wednesday, but a steady monetary policy is the most likely scenario. Strong growth data and above-target inflation might prompt the Fed to convey a hawkish message, skewing the risk to the downside for gold.