Gold prices rose modestly in early Wednesday trading as the US dollar weakened overnight. After two consecutive sessions of losses, the precious metal rebounded from support around $4,000, although gains remained limited as investors were reluctant to make sizeable moves ahead of today's Federal Reserve interest rate decision and policy statement. Gold typically moves inversely to the US dollar, and the overnight weakness in the greenback, driven largely by the pause in hostilities between the US and Iran and the resulting decline in oil prices, provided support for bullion. However, gains remained modest as traders awaited the outcome of this month's Federal Reserve meeting. While the central bank is expected to leave interest rates unchanged, market participants will closely scrutinise policymakers' assessment of inflationary risks and any indications of whether a rate hike in September remains a strong possibility. Against this backdrop, gold traders will remain focused on developments in the US-Iran conflict and the conclusion of the FOMC meeting later today, with the potential for more decisive price moves towards the end of the day.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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