Gold prices steadied above the key $5,000 level during Wednesday’s European session, recovering slightly after a brief dip earlier in the day. Despite this, the metal remains stuck within a narrow range seen since the start of the week, as traders avoid taking strong positions ahead of the upcoming policy decision from the Federal Reserve.
The Fed is widely expected to keep interest rates unchanged. However, attention will be on its policy statement, updated economic projections, and especially the “dot plot,” which outlines future rate expectations. Investors will also closely follow remarks from Fed Chair Jerome Powell for clues on how the central bank plans to handle inflation risks linked to geopolitical tensions.
Ongoing conflict in the Middle East continues to play a major role in shaping market sentiment. Disruptions near the Strait of Hormuz—an important route for global oil supply—have raised concerns about rising energy costs and inflation. This has led traders to scale back expectations for aggressive rate cuts in 2026, with markets now leaning toward a more limited easing path.
The shift in expectations has provided some support to the US Dollar, which has paused its recent decline. A stronger Dollar typically weighs on Gold, making it harder for prices to move higher. Still, persistent geopolitical uncertainty is keeping demand for safe-haven assets intact, helping Gold avoid deeper losses.
Tensions escalated further after Iran confirmed the deaths of senior officials, including Ali Larijani and Gholamreza Soleimani, in Israeli airstrikes. Iran has signaled that its response will be significant, raising the risk of further escalation. Meanwhile, US military actions targeting sites near the Strait of Hormuz have added to market unease.
Looking ahead, traders will also monitor policy decisions from other major central banks, including the European Central Bank, the Bank of Japan, and the Bank of England, which could drive further movement in the Gold market.
Technical Outlook
From a technical perspective, Gold shows a slightly bearish tone in the short term. Prices have slipped below the 200-period Simple Moving Average on the 4-hour chart, signaling some weakness.
Momentum indicators offer mixed signals. The MACD suggests a mild recovery attempt, but remains close to neutral, while the RSI sits below the midpoint, indicating ongoing selling pressure.
On the upside, immediate resistance is seen near $5,061. A move above this level could open the door toward $5,100. On the downside, initial support lies around $4,985. If this level breaks, the next targets are $4,950 and potentially $4,900. A sustained move above resistance levels would be needed to shift the overall tone back to bullish.
