Gold Price Stalls as Fed Meeting Looms and Risk Sentiment Improves

The gold price has been consolidating its gains in the European trading session following a bullish gap at the week's opening, driven by improved risk sentiment and a decline in US-Iran hostilities.

A pause in tensions between the two countries sent oil prices lower and pushed US Treasury yields down, but precious metals' rallies remain subdued as investors await the US Federal Reserve's monetary policy meeting on Wednesday.

The Fed's decision is expected to be a closely watched event, with futures markets pricing a 33% chance of a rate hike. A steady monetary policy is considered the most likely outcome, but strong growth data and above-target inflation could prompt the Fed's Chairman to convey a hawkish message.