Fed Decision Looms Large as Gold Prices Hold Steady at $4,029

Gold prices held steady around $4,029 an ounce on Wednesday as traders awaited the Federal Reserve's decision on interest rates. The FedWatch tool showed a 68% probability of keeping rates unchanged and a 32% chance of a quarter-point increase.

The market is expecting Chair Kevin Warsh to address inflation concerns in his press conference at 2:30 pm ET, which could influence gold prices. A less hawkish message from the Fed would likely boost gold, but a warning that rates may rise soon could limit any relief rally.

OANDA analyst Kelvin Wong said bullion would need a less hawkish message to reverse its recent bearish bias. The metal's response to inflation has become less straightforward, as tighter monetary policy raises the opportunity cost of holding an asset with no interest.