Gold Price Rises Amid Fed Hike Bets, But Safe-Haven Dollar Cools Upside Momentum

Gold prices have rebounded slightly from their lowest levels in over a month but remain capped by a bearish fundamental backdrop, particularly ahead of the Federal Reserve's two-day policy meeting.

The US central bank is set to announce its decision on interest rates, and investors will be closely watching for clues about the Fed's future policy path and any implications for the dollar's price dynamics.

Higher energy prices have contributed to inflation risks, leading to expectations of further Federal Reserve tightening, while a surge in public and corporate borrowing has fueled a global bond selloff, lifting US Treasury yields above 5% for the first time since 2023.

The safe-haven dollar remains near its two-week high, limiting any potential gains for gold, as geopolitical tensions persist, particularly following recent missile and drone attacks by Iran-backed Houthis in Yemen on a Saudi air base.