Gold Holds Steady as US-Iran Talks Continue Ahead of Fed Decision

Gold prices are holding steady near $4,065 an ounce as hopes for a US-Iran peace settlement persist ahead of this week's Federal Reserve interest-rate decision.

The recent surge in gold-backed exchange-traded funds (ETFs) has continued for five straight trading days, the longest streak since May. This uptick in buying is largely attributed to gold holding above the $4,000 level, which it has maintained since late June.

President Donald Trump's comments on the ongoing negotiations with Iran have added fuel to the fire, stating that 'something could happen' and warning of potential military conflict if talks fail. The US and Iran have halted airstrikes and attacks respectively for three straight days, while Oman and Iran are negotiating the resumption of shipping through the Strait of Hormuz.

As investors await the Fed's decision, interest-rate swaps are pricing in a 40% chance of a 0.25-percentage-point rate increase on Wednesday. Citadel Securities is also predicting a rate hike at this meeting.