Gold (XAU/USD) is trading sideways around the $4,600 level during the Asian session, as investors remain cautious ahead of the highly anticipated Federal Open Market Committee meeting scheduled later on Wednesday. Market participants are particularly focused on post-meeting remarks from Jerome Powell, which are expected to provide clearer direction on future monetary policy.
The Fed’s stance will likely shape near-term movements in the US Dollar (USD), ultimately influencing demand for gold—a non-yielding asset that tends to move inversely to the dollar.
Geopolitical Tensions and Oil Risks Keep Gold Under Pressure
Ongoing uncertainty surrounding US-Iran relations continues to support the US Dollar’s safe-haven appeal, limiting gold’s upside potential. Hopes for renewed diplomatic progress weakened after Donald Trump canceled a planned envoy visit to Pakistan, raising doubts over the possibility of near-term conflict resolution.
Reports also indicate dissatisfaction from Washington regarding Iran’s latest proposal, particularly its exclusion of nuclear discussions while focusing on reopening the Strait of Hormuz. Meanwhile, restricted shipping activity and increased US naval presence in the region have disrupted oil flows, keeping crude prices elevated and reigniting inflation concerns.
This backdrop could push central banks, including the Federal Reserve System, toward a more hawkish policy stance, further reducing gold’s appeal in the short term.
Bearish Technical Setup Limits Gold’s Recovery Potential
From a technical perspective, gold remains under pressure after failing to sustain gains above the 200-hour Exponential Moving Average (EMA). The recent breakdown below the $4,670–$4,665 support zone has reinforced bearish sentiment.
Momentum indicators reflect this outlook. The Relative Strength Index (RSI) is hovering near 40, signaling weak buying interest, while the Moving Average Convergence Divergence (MACD) shows early signs of a modest recovery attempt.
Immediate resistance is seen around $4,668, followed by a stronger barrier near the 200-period EMA at approximately $4,703. A decisive move above these levels would be needed to shift momentum in favor of bulls.
On the downside, a break below the $4,555 level could open the door to deeper losses, reinforcing the current bearish trend.
