Gold prices slipped below the US$4,700 level during Asian trading on Tuesday, as investors awaited fresh direction from the United States Federal Reserve while monitoring ongoing geopolitical tensions between Washington and Tehran.
By 3:20 pm AEST (5:20 am GMT), spot gold was trading 0.6% lower at US$4,653.63 per ounce.
The precious metal has struggled to establish a firm directional bias, with gains capped by a modest recovery in the U.S. dollar as market participants adopt a cautious stance ahead of the Federal Reserve’s two-day policy meeting, which begins later in the day.
Geopolitical uncertainty continues to underpin sentiment, as U.S.-Iran peace talks remain stalled. U.S. President Donald Trump on Monday discussed a new Iranian proposal with senior national security officials, though no breakthrough has been confirmed.
At the same time, investors are treading carefully ahead of a series of major central bank decisions this week.
In Japan, the Bank of Japan left interest rates unchanged on Tuesday, though internal divisions emerged as three of its nine board members favoured raising borrowing costs.
The central bank also revised its inflation forecasts higher and highlighted the risk of price pressures overshooting, reflecting the impact of the Middle East conflict.
Attention now turns to the Federal Reserve, where policymakers are expected to leave interest rates unchanged. Market focus will centre on Chair Jerome Powell’s press conference for clues on the economic outlook and inflation trajectory.
The upcoming meeting is also notable as it could be Powell’s final one as Fed Chair, following political developments in Washington.
Republican Senator Thom Tillis recently dropped his opposition to Kevin Warsh’s nomination, paving the way for a potential leadership transition at the central bank.
The Senate Banking Committee is expected to advance Warsh’s nomination to a full Senate vote, adding another layer of uncertainty to the policy outlook.
