Gold Slides Ahead of Fed Rate Hike Decision

Gold prices edged lower on Wednesday as traders assessed the likelihood of a US Federal Reserve rate hike. The metal has been under pressure due to higher borrowing costs, which are typically a headwind for non-yielding gold.

The Fed's interest rate decision is expected later on Wednesday, and policymakers are likely torn between June's tamer-than-expected inflation reading and the recent rise in oil prices following tensions in the Middle East. Interest rate swaps imply about a one-in-three chance of a quarter-point hike by the Fed.

Gold has held near the key support level of $4,000 an ounce since late June, but it's down nearly a quarter since the US-Iran war began on February 28. The recent increase in oil prices has stoked inflationary pressures and put further downward pressure on gold.