Investors await the Federal Reserve’s policy announcement, with elevated Treasury yields and a strong USD limiting gold’s appeal.
Gold (XAU/USD) trades around $4,003, extending losses as caution ahead of the Federal Reserve’s decision suppresses demand. Higher US Treasury yields and a firm US Dollar raise the opportunity cost of holding the non-yielding metal, reducing its attractiveness.
Markets expect the Fed to hold rates steady at 3.50%–3.75%, though uncertainty persists, with 64% of traders anticipating no change and an 80% chance of a 25-basis-point hike in September. Geopolitical tensions, including US-Iran hostilities, have failed to boost gold’s safe-haven appeal amid inflation concerns.
Crude oil prices surged after retaliatory strikes, raising fears of sustained inflationary pressures. Despite typical safe-haven demand, gold remains under pressure as investors focus on the Fed’s next moves.