The yellow metal maintained its prolonged defensive momentum as market players placed high bets on the outcome of this week’s FOMC policy meeting.
Investors continued to focus on the latest economic projections, including the dot plot, as well as Federal Reserve (Fed) Chairman Jerome Powell’s press conference for clues on the direction of future rate cuts.
At 10 a.m., gold prices were at $4,215, up 0.18% since it opened early Wednesday in Asian trading.
Meanwhile, expectations that the US central bank will lower borrowing costs this week and bets on more rate cuts in 2026 have limited the USD’s recovery from its lowest level since late October last week.
In addition, the ongoing geopolitical uncertainty resulting from the Russia-Ukraine war is also an important factor, potentially boosting demand for safe-haven assets like gold and preventing a deeper decline.
However, the price action that remained range-bound throughout the past week has made investors more cautious about making new bets, while waiting for a stronger sell signal before expecting additional declines in the XAU/USD pair.
For now, the focus is on the US macro data that will be released throughout the week for new market impetus.
