Gold Prices Stabilize Near $4,000 Amid Middle East Tensions and Fed Rate Uncertainty

The price of Gold (XAU/USD) has remained steady at around $4,020 per troy ounce for the second day in a row, as investors are cautious due to renewed hostilities in the Middle East and uncertainty over the Federal Reserve's upcoming policy decision.

The recent escalation in tensions stems from an Iranian attack targeting US troops stationed across the region, with Iran firing multiple ballistic missiles toward a US base in Jordan around 5:45 pm ET. The strike is widely believed to be a direct response to recent US actions targeting Iranian navy boats.

Investors are closely monitoring the Fed's upcoming policy decision, where the central bank is expected to leave interest rates unchanged. Despite repeated calls from US President Donald Trump for lower interest rates, market sentiment remains cautious; traders are currently pricing in a 30.5% chance of an immediate rate hike, an unusually high level of uncertainty so close to a policy announcement.

Looking further ahead, markets are also factoring in a 76.6% probability of a rate increase in September, reinforcing expectations that borrowing costs could remain elevated for longer.