Gold nudges above $4,000 as oil prices retreat and Fed decision approaches
Gold rose to around $4,056 after earlier losses, while oil slipped below $100 and the dollar strengthened ahead of the Federal Reserve's policy announcement.
Gold (XAU/USD) climbed back above $4,000 during U.S. trading hours on Tuesday after falling into negative territory earlier in the day. The metal was trading near $4,056 as a pullback in oil prices and a firmer U.S. dollar limited further gains, while markets awaited the Federal Reserve's monetary-policy decision on Wednesday.
West Texas Intermediate crude eased below $100 a barrel, retreating from Friday's peak of $103.28, as traders weighed diplomatic talks involving Saudi Arabia, Turkey, Pakistan and Iran against ongoing supply concerns, including security risks in the Strait of Hormuz and Houthi attacks on Saudi targets.
The U.S. Dollar Index rose to a two-week high above 102.00, up from a low of 101.45 last week, making gold more expensive for buyers using other currencies. ING strategists said the dollar had "found good support early this week" and noted that "pre-FOMC positioning may also be kicking in" as markets react to Chair Kevin Warsh's reaffirmation of inflation goals.
The Fed is widely expected to leave rates unchanged after a 25-basis-point hike to a range of 3.75%-4.00% in September, its first increase since 2023. Traders will watch the policy statement and Warsh's press conference for clues on future moves; the CME FedWatch Tool shows about an 80% chance of another hike in December.
Technical analysis shows gold trading below its 50-day, 100-day and 200-day moving averages, with the Relative Strength Index at 40 and the MACD in negative territory, indicating bearish momentum. Immediate support lies in the $4,000-$3,950 zone, while resistance levels are near $4,219, $4,288 and $4,400.