Gold is flatlined as investors await Federal Reserve's monetary policy announcement.
US 10-year Treasury yield dip reflects market caution before Fed's interest rate decision and economic outlook.
A potential upward adjustment in Fed's Dot Plot may hint at hawkish shift, a headwind for Gold’s price.
Gold price is virtually unchanged ahead of the US Federal Reserve’s monetary policy decision as traders remain on the sidelines. In addition to delivering the statement, Fed officials will update their economic projections, with investors eyeing a tweak to the Dot Plot, which could pave the way for a US Dollar comeback. The XAU/USD trades near $2,150.00, almost flat.
An hour before the Fed’s meeting, the US 10-year Treasury note yields 4.281%, down one basis point, as market participants remained uncertain. The US Dollar Index (DXY), a gauge of the buck’s value against a basket of six other currencies, rose 0.12% to 103.94, putting a lid on Bullion’s advance.
Financial market chatter suggests that if two Fed Dot Plot projections adjust to the upside in 2024, it would be perceived as a “hawkish tilt;” therefore, further XAU/USD downside is expected. On the other hand, there’s some speculation that policymakers could adjust their monetary policy expectations for 2025, suggesting the Federal Funds Rate (FFR) would be higher than December’s 3.6% estimate.
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