Gold fell 0.5% to $4,039 as rising Treasury yields and oil prices above $100 weigh on the market ahead of the Fed’s rate decision.

Gold (XAU/USD) slipped 0.5% on Wednesday, trading around $4,039, as the lingering US‑Iran conflict and higher oil prices kept risk appetite low while investors awaited the Federal Reserve’s policy decision at 18:00 GMT.

Market backdrop

• US 10‑year Treasury yield rose three basis points to 5.040%, adding pressure on non‑yielding assets such as gold.
• The US Dollar Index fell 0.09% to 102.27, reflecting a modest cooling of the greenback ahead of the Fed meeting.
• West Texas Intermediate crude hovered near $103 a barrel, up more than 3% on Middle‑East supply concerns.

Fed decision and inflation data

• Money markets have largely priced in a steady Fed funds rate of 3.75‑4.00% for the March meeting.
• Fed Chair Kevin Warsh is expected to face questions on why rates are not raised now, especially with oil near $103 and gasoline up $1.20 year‑on‑year.
• Traders will watch the Core PCE price index and Thursday’s GDP report for clues on a possible December rate hike; the swaps market shows an 85% chance of a 21‑bp tightening then.

Technical outlook

• Gold is consolidating between $4,000 and $4,100; a break above the September high near $4,100 could open the $4,200 level.
• Resistance at the 100‑day SMA ($4,218) and 50‑day SMA ($4,278) remains in sight if momentum turns bullish.
• Support lies at $4,000, with the next test at Friday’s low of $3,975, followed by $3,959 and the YTD low of $3,941.

What traders are watching next

• Whether XAU/USD can hold above $4,000 before the Fed’s 18:00 GMT decision.
• Core PCE inflation reading and Thursday’s GDP numbers for forward‑rate guidance.
• Any escalation in the Houthis‑Saudi Arabia clash that could push oil further up and revive safe‑haven demand for gold.

Related news

• Jeff Gundlach questions Fed's rate pause on CNBC
• Fed holds rates steady, bitcoin barely moves as December hike looms
• Obr downgrades uk growth forecast for 2027 despite healey budget
• Bitcoin and gold hold near key levels ahead of Fed decision

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This article is compiled from international market news for information only. It is not investment advice.