Gold Hovers as Fed Rate Decision Looms

Gold remains under pressure as markets prepare for the Federal Reserve's policy decision on Wednesday. The US inflation reports have strengthened expectations for a rate increase, adding further pressure on gold. According to the CME FedWatch Tool, markets now see an 86.5% probability of a rate increase at this meeting.

The latest US Producer Price Index and Consumer Price Index reports showed that inflation remains elevated. The monthly core consumer inflation increased by 0.3%, above expectations and the previous 0.2% reading. These figures have increased concerns that inflation may remain difficult for the Fed to control.

President Donald Trump's comments on interest rates have also added another layer of uncertainty as markets wait for the Fed's policy decision and guidance on future interest rates. He argued that the US should have the lowest interest rate in the world regardless of economic data.