Gold Edges Higher Amid Weaker Dollar, FOMC Meeting Looms

Gold prices have inched higher due to a softer US dollar as diplomatic efforts between the United States and Iran reduce geopolitical risk premiums, particularly in energy markets. Lower oil prices are also contributing to the weaker greenback, making dollar-denominated gold more attractive to holders of other currencies.

The Federal Reserve's two-day policy meeting has captured market attention, with investors eagerly awaiting the outcome for critical signals on interest rates. The central bank is widely expected to hold rates steady, but traders will scrutinize the accompanying statement and Chair Jerome Powell's press conference for any hints about future rate cuts.

A dovish tone could further weaken the dollar and provide additional support for gold, while a hawkish stance may cap gains. Gold has historically benefited from a combination of a weaker dollar and lower real interest rates, but its next move will hinge on the Fed's policy signals and whether the current geopolitical calm holds.