Gold Rebounds on US Treasury Yield Easing Ahead of Fed Decision

Gold prices rebounded on Wednesday after a two-day slide, reaching $4,340 as US Treasury yields eased and positioning shifted ahead of the Federal Reserve's policy decision.

The Fed is set to announce its policy at 18:00 GMT, with markets pricing in a 25 basis-point increase to a 3.75%, 4.00% federal funds range.

Despite the rebound, gold remains capped by strength in the US Dollar (USD), which hovered near two-week highs of 99.70.

Central bank demand and technical analysis suggest that gold's upside potential is limited to a breakout towards $4,540 if the Fed pauses its tightening cycle.