Gold slides near $4,020 ahead of Fed policy decision

Gold prices remained under pressure near weekly lows on Wednesday, July -, as markets awaited a key Federal Reserve policy decision and assessed a recent flare-up in Middle East tensions. The precious metal traded around $4,020, having failed to reclaim its traditional safe-haven status despite geopolitical risks and a selloff in Asian equities, with analysts pointing to the overwhelming influence of U.S. monetary policy.

The Federal Open Market Committee is widely expected to leave interest rates unchanged at a range of 3.50% to 3.75% when it concludes its meeting later today. Investors will scrutinize the policy statement and remarks from Fed Chair Kevin Warsh for signals about the future path of borrowing costs. Market consensus anticipates up to two dissenting votes in favor of a rate hike, likely from regional Fed presidents Logan and Hammack. A hawkish surprise, such as more than two dissenters or an unexpected rate increase, could push gold toward new monthly lows as tightening financial conditions boost the U.S. dollar. Conversely, a dovish surprise with a unanimous hold could trigger a relief rally as traders position for potential economic slowdown.