Gold price struggles to gain any meaningful traction and hangs near one-week low.
Hawkish Fed expectations underpin the USD and act as a headwind for the metal.
Traders seem reluctant to place aggressive bets ahead of the crucial FOMC decision.
Gold price (XAU/USD) extends its sideways consolidative price move during the Asian session on Wednesday as traders opt to wait for the outcome of the highly anticipated FOMC monetary policy meeting. Heading into the key central bank event risk, growing acceptance that the Federal Reserve (Fed) will stick to its higher-for-longer interest rates narrative amid sticky inflation lifts the US Dollar (USD) to a two-week high. This, along with the prevalent risk-on environment, turns out to be another factor acting as a headwind for the safe-haven precious metal.
The downside for the Gold price, however, remains cushioned in the wake of geopolitical risks stemming from the protracted Russia-Ukraine war and conflicts in the Middle East. Investors also seem reluctant and await more cues about the Fed's rate-cut path before placing fresh directional bets. Hence, the focus will remain on updated economic projections, which, along with Fed Chair Jerome Powell's comments at the post-meeting press conference, will play a key role in determining the next leg of a directional move for the non-yielding yellow metal.
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