HG MARKETS: 

Gold prices were little changed on Wednesday after posting gains in four straight sessions. An interim peace agreement between the United States and Iran helped alleviate concerns over energy-related inflation, while investors remained focused on the Federal Reserve’s policy decision due later in the day.

Spot gold slipped 0.1% to $4,327.56 per ounce, while  gold futures declined 0.2% to $4,347.26. The precious metal had rallied over the previous four sessions, recovering from multi-month lows around $4,000 an ounce.

Market sentiment improved on growing optimism over a U.S.-Iran agreement designed to de-escalate tensions in the Middle East.

The deal, which would allow Iran to restart oil exports and prolong the current ceasefire while diplomatic talks continue, has contributed to a sharp decline in crude oil prices and reduced concerns about a fresh wave of inflationary pressures.

Falling energy costs have led investors to temper expectations of further monetary tightening, creating a more favorable environment for gold, which does not generate interest income.

The precious metal has also drawn support from a weaker U.S. dollar, with the Dollar Index remaining close to its lowest level in more than a week.

Attention is now firmly centered on the Federal Reserve’s upcoming policy decision, the first under Chairperson Kevin Warsh. Policymakers are broadly expected to leave interest rates unchanged.

Market participants will closely examine the Fed’s revised economic forecasts and the closely watched “dot plot” for signals regarding the future direction of monetary policy.

Investors are especially focused on any indications regarding the possibility of interest rate cuts later this year.

Any indication that the Fed intends to maintain a restrictive policy stance could support the dollar and bond yields, potentially curbing gold’s gains.

Despite this risk, underlying demand for gold remains solid. According to a recent survey by the World Gold Council, nearly 45% of central bank reserve managers plan to increase their gold reserves over the coming year, highlighting the metal’s enduring appeal as a diversification tool and a safeguard against geopolitical uncertainty.