Gold Price Gains Limited as Investors Await Fed Decision

Gold prices (XAU/USD) have seen a modest rise for the third consecutive day during the early part of the European session, although significant upside remains elusive. The decline in US Treasury bond yields, coupled with ongoing concerns about geopolitical tensions in the Middle East and China’s economic challenges, continues to provide some support to the safe-haven precious metal. However, a slight increase in demand for the US Dollar (USD) could cap potential gains for gold.

Traders appear cautious, refraining from making substantial bets as they await the critical Federal Open Market Committee (FOMC) policy decision scheduled for later today. While the Fed is expected to maintain its current interest rates, market participants eagerly await insights from the accompanying monetary policy statement and Fed Chair Jerome Powell’s post-meeting press conference. The focus is on cues regarding the timing of the first interest rate cut, which will influence USD demand and impact gold prices.

The yield on the 10-year US government bond remains near the 4.0% mark, offering support to gold alongside concerns about geopolitical risks and China’s economic conditions. However, the USD’s resurgence, driven by reduced expectations for aggressive Federal Reserve policy easing, is likely to limit significant gains for the XAU/USD pair.

Investors are closely monitoring economic indicators, including the Job Openings and Labor Turnover Survey (JOLTS) report, the US Consumer Confidence Index, and the International Monetary Fund’s upgraded forecast for US economic growth. These factors contribute to the market sentiment ahead of the FOMC decision, shaping the direction for gold prices.

From a technical perspective, gold faces resistance around the $2,040-2,042 level, with a failure to surpass this zone leading to potential support levels around $2,012-2,010 and the psychological mark of $2,000. On the upside, a breakthrough of the resistance zone could pave the way for further gains toward $2,077, with bullish momentum targeting the $2,100 round-figure mark.

Overall, the gold market is navigating uncertainties, with investors poised for potential market shifts following the FOMC decision.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the .

USD 0.23%0.14%0.12%0.39%0.18%0.25%0.17%
EUR-0.23% -0.09%-0.11%0.18%-0.05%0.02%-0.05%
GBP-0.14%0.09% -0.01%0.25%0.05%0.10%0.04%
CAD-0.12%0.11%0.00% 0.27%0.06%0.13%0.05%
AUD-0.39%-0.16%-0.24%-0.27% -0.21%-0.13%-0.22%
JPY-0.18%0.05%-0.06%-0.06%0.24% 0.05%-0.01%
NZD-0.24%0.02%-0.10%-0.13%0.15%-0.08% -0.07%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

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