Gold Stays Above $4,000 as Markets Brace for Fed Decision

The Federal Open Market Committee is expected to leave rates unchanged, though futures pricing maintains a one-third probability of a hike. This ambiguity, coupled with the 10-year Treasury yield at 4.62% and a firm dollar, exerts downward pressure on non-yielding bullion. Market participants are also weighing the implications of renewed military friction in the Strait of Hormuz, where intercepted missile barrages have pushed crude oil prices up by more than 4%.

While geopolitical instability typically drives demand for defensive assets, the resulting surge in energy costs threatens to exacerbate inflation, potentially keeping interest rates higher for longer. Traders are now focused on incoming economic indicators, including Thursday’s GDP data and Friday’s PCE inflation report. Technically, both gold and silver remain under pressure, trading below their 50-period and 100-period moving averages. A failure to hold the $4,011 level would likely shift market focus toward the $3,959 support zone.