Gold Prices Weaken Ahead of Fed Decision Amid Inflation Concerns

Gold prices have been experiencing short-term weakness ahead of the Federal Reserve's decision on July 29, 2026. The XAU/USD has seen a decline of nearly -2.4% over the last four trading sessions, indicating a selling bias in the market.

The market is expecting a possible more aggressive tone from the Fed, which could limit gold's ability to sustain a consistent recovery and affect its price if confirmed.

According to the CME Group probability table, there's above 70% chance that the central bank will keep interest rates unchanged, but attention will be on the Fed's comments regarding potential rate hikes for the September 16 meeting.

The annual inflation measured by CPI in June stood at 3.5%, which is still above the Fed's 2.00% target, leading to concerns about a more aggressive stance from the central bank.