Key points:

• Gold prices tumble to $4,620
• Fed decision coming Wednesday
• Dollar gains ground in forex trading

Bullion is struggling to hold steady as traders may be pricing in the expected rate hold, likely playing out the old ‘opportunity cost’ trade.

📉 Gold Slips as Support Breaks Lower

• Gold (XAU/USD) dropped about 1.2% from roughly $4,680 to near $4,620 Tuesday, extending losses after breaking below a rising channel last week — a technical signal that upward momentum has weakened.
• The move suggests traders are stepping back rather than rushing in for safety, even with geopolitical tensions still simmering in the background.
• When support levels fail, markets often enter “price discovery” mode — a phase where traders test new floors without clear consensus on fair value. It’s where volatility spins up and it can get wild.

🛢️ Oil Above $105 Keeps Pressure On

• Brent crude climbed above $105 per barrel Monday as shipping through the Strait of Hormuz remained restricted, keeping inflation concerns elevated and complicating the outlook for central banks.
• Higher oil tends to lift inflation expectations, which pushes bond yields higher. Rising yields reduce gold’s appeal because bullion doesn’t pay interest like bonds do.
• The result: gold’s traditional safe-haven status gets challenged by macro forces that favor cash and yield-bearing assets instead.

🏦 Fed Decision Looms

• Traders now turn to the Federal Reserve meeting Wednesday, with Fed policymakers widely expected to leave borrowing costs flat in what could be one of Jerome Powell’s final policy decisions.
• A rate hold reinforces the classic ‘opportunity cost’ trade — meaning investors prefer assets that generate interest over gold, which generates none.
• With inflation still elevated and energy markets tight, bullion remains caught between safe-haven demand and rising yields. Until one side clearly wins, volatility may stay the default setting.

Source: Tradingview