Gold (XAU/USD) is consolidating around the $4,600 level during the Asian session, with market participants awaiting the outcome of the two-day FOMC policy meeting scheduled to conclude on Wednesday. The focus is on the post-meeting press conference, where remarks from outgoing US Federal Reserve Chair Jerome Powell are expected to provide guidance on the future policy path, which could significantly influence US Dollar dynamics and, consequently, gold prices [1].
The price of gold remains close to a three-week low, a situation underpinned by ongoing uncertainty regarding the second round of US-Iran peace talks. Over the weekend, hopes for diplomatic progress diminished after US President Donald Trump canceled his special envoy's planned visit to Pakistan. Additionally, media reports indicate Trump's dissatisfaction with Iran's new proposal concerning the conflict and the reopening of the Strait of Hormuz, with nuclear program discussions set aside for now [1].
Shipping traffic through the Strait of Hormuz has sharply declined due to Iranian restrictions and a US naval blockade of Iranian ports. This ongoing US-Iran stalemate is supporting elevated crude oil prices and reviving inflationary concerns, which may prompt the US Fed and other major central banks to adopt a more hawkish stance. Such a stance could cap any upside for gold, making recovery attempts vulnerable to quick reversals [1].
From a technical perspective, gold's recent failure near the 200-hour EMA and a break below the $4,670-4,665 support zone have emboldened bearish traders. The Relative Strength Index (RSI) around 40 signals subdued buying pressure, while the MACD histogram turning positive hints at a modest recovery attempt. Initial resistance is identified at $4,668.04, with the 200-period EMA at $4,703.69 as a more significant barrier. On the downside, a move below the overnight swing low of $4,555 could expose gold to further declines [1].
CONCLUSION
Gold is trading near $4,600 as traders await the Fed's policy decision and monitor ongoing US-Iran tensions. Technical indicators suggest a bearish outlook, with any recovery attempts likely to face strong resistance. Market sentiment remains cautious, with inflationary concerns and geopolitical risks limiting gold's upside potential.