Gold price (XAU/USD) struggles for direction as market participants eye the interest rate decision by the Federal Reserve (Fed) and further developments in the Israel-Palestine war. The near-term demand for the precious metal is bullish as Middle East tensions are seen escalating further. The Israeli military troops are gradually entering Gaza for the ground assault to root out Hamas. In addition to Middle East tensions, higher expectations of a steady monetary policy from the Fed on Wednesday are consistently supporting the Gold price. Fed policymakers have been supporting keeping interest rates unchanged in the range of 5.25-5.50% due to higher US long-term bond yields and consistently easing price pressures. The Fed is expected to advocate for keeping interest rates higher for a longer period as strong consumer spending and tight employment conditions could keep the inflation outlook stubborn.
Gold price trades in a limited range around $1,995 as investors await the Fed’s monetary policy. The precious metal delivered a time-corrective move after facing barricades near a five-month high of $2,009. The broader Gold price outlook remains bullish as the 20-day Exponential Moving Average (EMA) has delivered a bullish crossover above the 50 and 200-day EMAs. Momentum indicators oscillate in the bullish range, warranting more upside.
