Gold prices traded in a narrow range around $4,316 per ounce on Tuesday. Market participants shifted focus to the Federal Open Market Committee (FOMC) meeting, the first chaired by Kevin Warsh. Trading activity remained subdued as investors squared positions before Wednesday’s policy announcement.
The market expects the Federal Reserve to keep interest rates on hold. A recent U.S.-Iran peace agreement lowered oil prices and eased global inflation concerns. This Middle East de-escalation also reduced safe-haven demand for the U.S. dollar, providing support for gold.
Investors are monitoring the Fed’s updated economic projections for clues on the future path of monetary policy. Separately, a World Gold Council survey revealed a record number of central banks plan to increase gold reserves over the next year. This survey signals strong underlying structural support for the metal.