Gold prices fell below the $4,700 per ounce threshold on Tuesday as news of a potential proposal from Iran to reopen the Strait of Hormuz dampened demand for the precious metal. Traders also adopted a cautious stance as the Federal Open Market Committee (FOMC) convened for its two-day policy meeting, set to conclude on Wednesday.
XAUUSD – 5 Days Chart
Market Snapshot
Gold (XAU/USD) traded lower during Tuesday’s session, extending losses that saw the metal break beneath the significant $4,700 support level. Prices remained pressured as investors recalibrated their portfolios ahead of the upcoming US Federal Reserve interest rate decision, which is scheduled for announcement at 2:00 PM ET on April 29. The metal’s decline reflects a cooling of geopolitical risk premiums that have historically supported its recent performance.
Event Details
Market participants are reacting to reports of a proposed deal between Iran and the United States aimed at de-escalating tensions in the Strait of Hormuz. While previous weeks were dominated by supply disruption fears, this development has introduced a cautious optimism into the commodities sector. Simultaneously, the FOMC began its scheduled meeting on April 28, with market consensus widely expecting the committee to maintain the current federal funds rate of 3.50%–3.75%.
Outlook
The trajectory of gold prices in the coming sessions will likely depend on concrete developments regarding the Hormuz proposal and the tone of the FOMC policy statement. Investors will watch the following factors:
- Official confirmation of terms regarding the Strait of Hormuz reopening.
- The outcome of the FOMC policy statement and any updates to the committee’s economic projections.
- Continued technical support or resistance levels for XAU/USD as it consolidates below the $4,700 mark.
