Today, Wednesday, gold (XAU/USD) is trading at the symbolic round level of $5000, remaining within the narrow range established since the beginning of the week, as market participants exercise caution ahead of the key FOMC meeting.

The US Federal Reserve is expected to keep current interest rate policy parameters unchanged following its two-day meeting. Investors should also pay attention to the accompanying statement and updated economic forecasts, including the revised "dot plot." Comments from Fed Chair Jerome Powell will be especially important for the future dynamics of the dollar and gold, as he is likely to clarify the outlook for monetary policy amid ongoing inflation risks caused by military conflicts and supply chain disruptions. This, in turn, will influence the US dollar's trajectory, giving new momentum to the precious metal.

Meanwhile, the situation in the Middle East is increasing tension in commodity markets. Joint strikes by the US and Israel on Iranian territory, along with the effective blockage of the Strait of Hormuz—a strategic route through which about 20% of the world's oil passes—have caused significant disruptions in energy trade. This has intensified concerns about rising inflation and prompted a reassessment of expectations regarding the Fed's interest rate path: whereas the market had previously anticipated several rate cuts this year, most forecasts are now limited to a single possible cut in December.

This shift in expectations is supporting the US dollar, helping it stabilize after a two-day decline from levels last seen in May 2025, which in turn is putting pressure on gold prices. However, heightened geopolitical uncertainty continues to drive demand for safe-haven assets, limiting the scale of any correction in XAU/USD and keeping sellers cautious.

According to media reports, Israeli airstrikes on Tuesday resulted in the deaths of Iranian officials, including senior National Security Council member Ali Larijani and Basij leader Gholamreza Soleimani. Iran's Chief of Staff of the Armed Forces, Amir Hatami, stated that Tehran's response would be "decisive and painful." At the same time, US forces carried out strikes on Iranian targets near the Strait of Hormuz. The escalation of the conflict in the region remains a potential supporting factor for gold.

Investors may also focus on upcoming decisions from the European Central Bank, the Bank of Japan, and the Bank of England, which could set the tone for XAU/USD dynamics in the second half of the week.

From a technical perspective, the short-term trend is moderately bearish, as the pair is trading just above the 50-day SMA, which is currently acting as support. If this level fails to hold, prices could accelerate their decline toward the $4850 target. Oscillators on the daily chart are mixed, while the Relative Strength Index (RSI) is in negative territory, indicating weakness among bulls. For bulls to regain strength, they need to reach and break above the 20-day SMA.