Gold is consolidating the previous sell-off to monthly lows of $4,555 set on Tuesday, as traders turn to the sidelines and refrain from placing fresh bets ahead of the Federal Reserve (Fed) monetary policy decision due later on Wednesday.

Gold stalls decline ahead of Fed verdict

Gold came under intense selling pressure on Tuesday as the Oil price surge resumed on the back of the continued stand-off between the United States (US) and Iran, especially after US President Donald Trump expressed his displeasure with the new Iranian proposal toward ending the war.

Additionally, the United Arab Emirates’ (UAE) decision to leave OPEC and OPEC+ after nearly six decades also contributed to the renewed upside in the black gold.

The uptrend in Oil keeps expectations of rising inflation alive, bolstering hawkish bets surrounding the Fed, as the US central bank’s two-day monetary meeting concludes on Wednesday. Gold tends to thrive in a low-interest-rate environment.

Markets are widely expecting the Fed to hold rates steady in the range of 3.5% to 3.75% on Wednesday, but the message from outgoing Chairman Jerome Powell will be closely scrutinized for any hints on the possibility of a rate hike this year. Powell’s take on inflation amidst the Middle East conflict will also be dissected for future policy implications.

If Powell sticks to his patient and data-dependent rhetoric, prioritizing supporting the labor market, it would be perceived as dovish. In such a case, the US Dollar (USD) could come under intense selling pressure, fuelling a solid Gold price recovery.

Conversely, Gold could extend the recent decline if the Fed chair hints at a hawkish pivot, reviving bets for a rate hike by end-2026. Powell’s comments will hold the key as its his last post-monetary policy meeting press conference. Kevin Warsh will lead the Fed as the new Chair from May 15.

In the lead-up to the Fed event risks, fresh developments around the US-Iran stalemate, and some profit-taking sprints could influence the Gold price action.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,596.48, keeping a bearish near-term bias as it holds below the short- and medium-term simple moving averages (SMAs). The 21-day SMA at roughly $4,726 and the 100-day SMA near $4,754 sit overhead as dynamic resistance, while the longer-term 200-day SMA around $4,270 remains a distant underlying support. A downward resistance trend line capped near $4,684 reinforces the topside constraint, and the Relative Strength Index (14) hovering around 40 hints at still-soft momentum, limiting recovery attempts for now.

On the topside, initial resistance is seen at the descending trend-line area around $4,685, followed by the 21-day SMA at $4,726 and the 100-day SMA near $4,754; a sustained break above these levels would be needed to ease the current bearish pressure and reopen the path toward the 50-day SMA around $4,850. On the downside, immediate focus stays on the recent pivot region around the current price, with the rising trend-line support near $4,381 next in line, ahead of the 200-day SMA clustered around $4,270, where stronger buyers could attempt to reassert the broader uptrend.

(The technical analysis of this story was written with the help of an AI tool.)

Silver (XAG/USD) trades with a downside bias on Tuesday, down over 2.5%, as a higher-for-longer interest rate outlook continues to weigh on price action. Rising inflation risks, driven by elevated Oil prices amid ongoing Middle East supply disruptions, are pushing US Treasury yields higher, reducing the appeal of the non-yielding metal. At the time of writing, XAG/USD is trading around $73.25, its lowest level since April 13.

Meanwhile, a lack of progress in US-Iran talks to end the war keeps the US Dollar (USD) firmly supported, adding further pressure on XAG/USD. While Silver typically benefits from geopolitical tensions, rising expectations of tighter monetary policy by global central banks remain a key headwind for the metal, which is currently down over 20% since the US-Iran war began, despite recovering from its March low.

Attention now turns to the Federal Reserve’s (Fed) monetary policy decision due on Wednesday, where traders widely expect the central bank to keep interest rates unchanged. Inflation in the US remains sticky and above the Fed’s 2% target, with the recent surge in Oil prices adding further pressure. As a result, the focus will be on forward guidance, with markets awaiting clarity on the future path of interest rates. Higher borrowing costs increase the opportunity cost of holding non-yielding assets like Silver.

Technical Analysis:

In the daily chart, XAG/USD maintains a bearish near-term bias as it trades below both the 100-day and 50-day Simple Moving Averages (SMAs), which are closely aligned and showing early signs of a bearish crossover, keeping the near-term bias tilted to the downside.

Momentum indicators echo this soft tone, with the Relative Strength Index (RSI) hovering near 42 and the Moving Average Convergence Divergence (MACD) line slipping just below zero, while a subdued Average Directional Index (ADX) around 12 suggests a weak and potentially range-bound trend.

On the upside, the moving average cluster between $78.50-$79.50, where the 50-day and 100-day SMAs converge, marks initial resistance and would need to be reclaimed to ease the current bearish pressure. The next meaningful resistance is seen near the $90 psychological level.

On the downside, the $70 level marks initial support, followed by the 200-day SMA near $62.40, which stands out as the next major structural support.

(The technical analysis of this story was written with the help of an AI tool.)

Silver price (XAG/USD) falls around 1.5%, trading around $74.40 per troy ounce during the Asian hours on Tuesday. The non-yielding metal declines as the US–Iran conflict fuels an energy-driven inflation shock, raising expectations of prolonged or tighter central banks’ policy.

However, markets weigh prospects of a lasting ceasefire and a potential reopening after Iran’s fresh proposal to the United States (US). Tehran reportedly signaled via Pakistan that hostilities could end if Washington lifts its naval blockade, revises transit rules through Hormuz, and guarantees against future military action.

On the contrary, a US official said on Monday that President Donald Trump is dissatisfied with Iran’s proposal. Iranian sources added that Tehran avoided addressing its nuclear program until hostilities cease and Gulf shipping disputes are resolved.

Traders are also looking ahead to policy decisions from key central banks this week, including the US Federal Reserve (Fed), European Central Bank (ECB), and Bank of Japan (BoJ). The Federal Reserve (Fed) is widely expected to keep interest rates unchanged at its upcoming April policy meeting on Wednesday, maintaining the federal funds target range at 3.50% to 3.75%. This would mark the third consecutive hold.

The Bank of Japan is expected to hold rates at 0.75% later in the day amid economic concerns from the US–Iran war, while the European Central Bank is also likely to keep its deposit rate unchanged at 2.0% on Thursday.