Gold Trades Above $4,000 as Traders Await Fed Decision

Gold prices held above $4,000 on Wednesday as traders kept their positions tight ahead of the Federal Reserve's rate announcement. The metal was trading near $4,017.10 an ounce, down 0.27% from the previous session.

The FOMC decision is due at 2 p.m. ET, followed by Chair Kevin Warsh's press conference at 2:30 p.m. ET. Markets broadly expect rates to remain unchanged, but futures pricing still assigns a one-third probability to a hike today and a September hike is largely priced in.

The Strait of Hormuz situation remains tense, with crude oil prices jumping more than 4% as traders repriced chokepoint risk. Brent crude traded near $85.79 and WTI near $83.04, with the waterway carrying about 20% of the world's traded oil under normal conditions.

The impact on gold is two-sided: geopolitical risk supports defensive demand, but higher oil prices lift inflation risk, keeping yields firm and limiting the upside for non-yielding bullion.