Gold Price Forecast: XAU/USD consolidates below $4,350 ahead of Fed decision

Gold (XAU/USD) is currently consolidating below $4,350 on Wednesday, as investors hold off on large positions ahead of the Federal Reserve's monetary policy decision. The Federal Reserve is expected to raise interest rates by 25 basis points, but the rise in US Treasury yields is limiting the precious metal's upside potential. Tensions in the Middle East and risks of disruptions to oil supply continue to fuel inflationary pressures and safe-haven demand, providing support to gold.

However, elevated US yields and prospects of further monetary tightening by the Fed encourage traders to remain cautious ahead of the central bank's announcement. Technical analysis indicates that XAU/USD is trading near the 100-day simple moving average ($4,326.81) and remains capped by the 200-day SMA ($4,540.24) and broader downward resistance structure, keeping the broader tone neutral to slightly bearish.

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