Gold prices are holding onto losses near the $4,000 mark on Tuesday, as the US Dollar remains strong ahead of the Federal Open Market Committee (FOMC) meeting. The precious metal has been under pressure, though it remains above the three-month low reached on Monday. Traders are adopting a cautious stance, waiting for the outcome of the FOMC's two-day policy meeting on Wednesday.
The Federal Reserve has signaled no urgency to raise interest rates, but traders still anticipate an over 80% chance of a rate hike in December. Inflation concerns, driven by higher energy prices, are supporting expectations of further tightening by the Fed. The focus will be on the policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference, as no updated economic projections will be provided.
Key economic data releases, including the Advance US Q3 GDP and the Personal Consumption Expenditures (PCE) Price Index, will also influence market sentiment. The US Dollar is finding support from a modest recovery in US bond yields and geopolitical tensions in the Middle East. Stalled US-Iran talks and attacks by Iran-aligned Houthis on Saudi Arabia are contributing to the risk premium, favoring the safe-haven US Dollar and weighing on gold.
Technically, gold maintains a bearish near-term tone after breaking through a short-term trading range. The 200-period Simple Moving Average (SMA) on the 4-hour chart, at $4,198.08, acts as a key resistance level. The Moving Average Convergence Divergence (MACD) indicator shows the line above zero and advancing, while the Relative Strength Index (RSI) has recovered toward the mid-30s from oversold territory. A break below $4,000 could signal deeper losses, while resistance levels are noted at $4,065-$4,075 and $4,100.