$4000 Under Siege: Fed Decision Looms Large for Gold Prices
Gold prices are under pressure as the US Dollar strengthens, and investors await the Federal Reserve's interest-rate decision on Wednesday. The precious metal is currently trading at around $4,027, down 1.20% on the day.
US President Donald Trump said that talks with Iran are ongoing, but military action could resume if negotiations fail. This has led to a sharp pullback in Oil prices, which remain elevated and fuel inflation concerns.
The Fed's decision is expected to be pivotal for Gold's price action, as a surprise rate hike would put the metal at risk of falling below $4,000. A hawkish hold, where the Fed leaves rates unchanged while keeping the door open to an increase later this year, could also leave Gold vulnerable to a break below $4,000.
Technical analysis suggests that bears retain control as Gold trades below its 20-day Simple Moving Average and the middle Bollinger Band. Initial resistance emerges at the Bollinger middle band and 20-day SMA near $4,072, while immediate support is seen at the psychological $4,000 handle.