Gold Bounces Ahead of Fed Meeting Amid Hawkish Expectations

Gold prices are experiencing a tepid bounce from six-day lows near $4,000 in Asian trades on Wednesday. The market is awaiting the outcome of the US Federal Reserve's monetary policy meeting to determine its next major move.

The gold price has been consolidating two back-to-back days of losses, with traders repositioning ahead of the Fed event risks. Despite this, gold is attempting to build on its intraday bounce, with the US Dollar holding overnight losses following soft US Goods Trade Balance data for June and a profit-taking pullback from three-month highs.

However, resumption of hostilities in the Middle East has fueled a sharp 4% rebound in Oil prices, reigniting inflation concerns and boosting hawkish Fed expectations. This limits the renewed upside in non-yielding bullion, with traders refraining from creating fresh positions before the Fed policy announcements.