Gold Prices Steady Below $3,400 as Market Awaits Fed Rate Guidance

Gold Prices Steady Below $3,400 as Market Awaits Fed Rate Guidance

Gold (XAU/USD) remains directionless early Tuesday, trading just below the $3,400 mark in the European session. Investors are adopting a cautious, wait-and-see approach as markets brace for the outcome of the Federal Reserve's two-day FOMC meeting, which begins later today.

Investors Await FOMC Clarity

With uncertainty surrounding the Fed’s next move on interest rates, gold prices are holding within a narrow range. The market widely expects that the Fed may start lowering interest rates in 2025, fueling a persistent downtrend in the US Dollar, which now hovers near its three-year low. This backdrop supports non-yielding safe-haven assets like gold.

Geopolitical and Trade Risk Underpin Gold Demand

Apart from the dovish Fed outlook, investors remain alert to ongoing geopolitical tensions in the Middle East and global trade concerns, which also contribute to the strength of gold as a hedge. These risk factors are helping the metal absorb minor retracements from recent multi-week highs.

Technical Snapshot: What to Watch

• Resistance: $3,400 (psychological barrier), followed by $3,428 (2-month high)
• Support: $3,370 and $3,350 levels
• Traders should monitor Wednesday’s FOMC statement and Fed Chair Jerome Powell’s press conference for directional confirmation.

Conclusion: All Eyes on the Fed

Until the FOMC outcome becomes clear, gold prices are likely to remain range-bound, with downside limited by safe-haven flows and upside capped by caution. A dovish tilt from the Fed could accelerate gold’s next leg higher.

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