Gold Price Below $3,400 as FOMC Looms Amid Geopolitical Risk

• Gold price remains consolidating under $3,400 as markets await the FOMC meeting.
• The Fed’s economic projection and dot plot are key to watch.
• Geopolitical concerns and a stronger dollar may keep the momentum neutral.

Gold price stays under pressure, trading at $3,383, at the time of writing, during the London session. Market participants are anxiously waiting for the Fed’s highly anticipated policy decision today. The precious metal that hit the fresh 2-month top, earlier this week. However, it is now cautious amid geopolitical worries and weaker US data.

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Market participants are widely anticipating the Fed to hold rates. However, the focus has been shifted to updated economic projections and the dot plot. Expectations split between one and two rate cuts by 2025 while the tone and language of the Fed could drive the dollar and gold prices. Although the risk of a hawkish tilt exists amid tariff concerns and oil-led inflation, the weaker economic data supports the case for a dovish tone.

The US inflation appears to ease, with CPI and PPI figures came in softer than expected which aligns with the Fed’s target of 2%. The odds for a shift of policy by September have been raised. Markets are currently pricing in the 50 bps rate cut by the end of 2025, while real yields are also slipping, expecting a dovish lean. If the Fed confirms this trajectory, gold may rally towards the all-time highs.

On the other hand, geopolitical situation in the Middle East stays elevated. Iran-Israel conflict continues on the sixth day while Trump’s aggressive stance has also fueled the safe-haven demand. Despite this, a strong dollar keeps the gains limited.

Gold Price Technical Outlook: Sideways Move Under 20-SMA

The 4-hour chart shows a consolidation below the $3,400 mark. The price stays under the key 20-period SMA which signals a short-term weakness. The RSI is also sideways near the 50.0 level, suggesting a neutral outlook. The support area lies around $3,340 ahead of $3,300.

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On the upside, finding acceptance above 20-period SMA and the $3,400 level is important to resume the uptrend. A sustained breakout may look to test $3,440 ahead of all-time highs at $3,500.

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