XAU/USD consolidates gains ahead of the Fed’s policy decision, with investors awaiting US economic data for direction.
Gold prices hovered around $4,101 during European trading, supported by a modest improvement in risk sentiment and lower US Treasury yields. A pause in US-Iran tensions weighed on the safe-haven USD, while oil prices fell $10 from last week’s peak.
Investors remain cautious ahead of the Federal Reserve’s monetary policy meeting on Wednesday. Futures markets price a 33% chance of a rate hike, though steady policy is seen as the most likely outcome. Strong US economic data could still prompt a hawkish Fed message, pressuring gold.
US Durable Goods Orders and the Dallas Fed Manufacturing Index, due later today, may offer clues on industrial activity and influence the Fed’s decision. Technical indicators show neutral-to-positive momentum, with XAU/USD trading in a narrowing range since late June.