Fed Decision Looms Large in Gold Market as Traders Await Warsh's Tone

The gold market is bracing for a crucial decision by the Federal Reserve on Wednesday. With futures markets assigning a 68% probability to no change in interest rates and a 32% chance of a quarter-point increase, traders are expecting volatility.

Gold held steady near $4,029 an ounce as traders avoided large bets ahead of the Fed's announcement. The market is focused on how forcefully Federal Reserve Chair Kevin Warsh addresses inflation during his press conference at 2:30 pm ET.

The US military intercepted Iranian ballistic missiles aimed at American forces, and firmer oil prices have intensified concerns about rising energy costs. A stronger dollar has also added to the headwinds facing gold.