Markets Await Federal Reserve Policy Decision

Financial markets are broadly cautious as they await the Federal Reserve's upcoming interest rate decision, which will be the first under new Chair Kevin Warsh. The US Dollar firmed ahead of the announcement, supported by expectations of a hawkish policy tilt from the central bank. This has led to a wait-and-see approach among traders, causing consolidation in several major currency pairs.

Central Bank Demand and De-Dollarization Support Gold

Underlying support for gold continues to stem from strong interest by global central banks, according to market analysis. This demand is reportedly driven by rising geopolitical insecurity and an ongoing trend of de-dollarization among some nations.

Geopolitical and Inflation Crosscurrents Influence Markets

Reports of a potential US-Iran peace framework are reducing geopolitical risk premiums, which has contributed to a decline in oil prices and may be tempering safe-haven demand for assets. Meanwhile, the global inflation picture is mixed, with UK inflation holding steady while European Central Bank policymakers signal potential for further rate hikes. Amid these developments, gold prices in the key physical market of India saw a decline.