Gold prices are trading below $4,300, near a one-month low, ahead of the Fed meeting on September 15-16, after U.S. inflation data reinforced expectations that the Fed may raise interest rates. Markets are watching the Dot Plot and remarks from Fed Chair Kevin Warsh to gauge the direction of rates ahead. Pressure on gold also stems from energy inflation risks and bond selling, pushing the 10-year U.S. bond yield up to 5%, and a move above 5.02% would be the highest level since July 2007. Meanwhile, the dollar is holding steady near its highest level in almost two weeks. In the Middle East, Saudi Arabia shut a key oil pipeline after a drone attack, while Iran claimed it destroyed a U.S. drone over the Strait of Hormuz, and President Trump said the United States could take control of Iran's oil resources. Technically, gold remains below the MA200 on the 4-hour chart and the RSI is below 50. If it cannot hold above $4,350, it may pull back to test support at $4,270-4,250, with the Fed's decision a key factor for price direction ahead.
Inflation data reinforced expectations the Fed may raise rates, pushing the 10-year U.S. bond yield up to 5%.
