Gold Consolidates Near Two-Week Low as Traders Await FOMC Decision Amid US-Iran Tensions

Gold prices are consolidating near their two-week low, hovering above $4,000 as traders await the outcome of the Federal Reserve's (Fed) FOMC decision. The US Dollar has softened slightly, providing some support to the precious metal, but tensions between the US and Iran remain high.

The recent escalation in Middle East crisis led by Iran's Islamic Revolutionary Guard Corps' missile attack on US forces was successfully intercepted by the US Central Command (Centcom). However, President Donald Trump warned of strong military action if diplomatic efforts fail to resolve the crisis.

This geopolitical risk premium is likely to support the safe-haven US Dollar. Additionally, concerns about global energy supply disruptions have triggered a sharp recovery in crude oil prices, reviving inflation fears and bolstering bets for at least one interest rate hike by the Fed.

From a technical perspective, gold's bearish setup suggests further near-term depreciation. The Relative Strength Index (RSI) hovers around 43, indicating mildly negative momentum, while the Moving Average Convergence Divergence (MACD) edges higher, hinting at a tentative recovery attempt within a still-depressed structure.