Figure 1: XAUUSD, H4, TradingViewFigure 1: XAUUSD, H4, TradingView

Markets are awaiting today's Federal Reserve interest rate decision, with broad expectations that policymakers will leave rates unchanged. However, investors are focusing more closely on the central bank's tone and its outlook for inflation and future interest rates.

For gold, any hawkish signals from the Federal Reserve that reinforce persistent inflationary pressures or delay expectations for future rate cuts could support the U.S. dollar and push Treasury yields higher, potentially weighing on the precious metal.

Conversely, if the Fed adopts a more flexible stance toward future rate cuts, the dollar and bond yields could decline, providing additional support for gold prices.

Investors will also closely monitor the Dot Plot and the Federal Reserve Chair's press conference for further clues regarding the future path of monetary policy.

Gold currently remains caught between interest rate expectations on one side and continued safe-haven demand amid economic and geopolitical uncertainty on the other.

Technical Outlook

Despite easing geopolitical tensions in recent weeks, gold prices managed to break above the short-term downtrend on the four-hour chart, forming a series of higher highs and signaling a shift in momentum from bearish to bullish.

However, prices have recently lost part of their upward momentum after failing to establish a new high, leading to range-bound trading between resistance at 4,369.520 and support at 4,300.980.

As a result, traders may prefer to wait for a breakout from either side of this range. A break and close above resistance could support a continuation of the bullish trend, while a break below support may open the door for a corrective decline, particularly as markets await the outcome of the Federal Reserve meeting.