The U.S. Dollar Index (DXY) slipped to 97.685, just above last week’s multi-year low. Bearish sentiment is holding, with fresh short positions likely to cap any bounce.
Despite the dollar’s weakness, gold failed to capitalize, suggesting broader indecision across markets. According to analysts, the lack of safe-haven flow into the dollar and Treasuries highlights traders’ focus on upcoming central bank guidance over geopolitical drivers.
Fed Outlook to Steer Near-Term Price Action
Traders now await Wednesday’s Federal Reserve decision, with expectations pointing toward an unchanged rate. However, forward guidance will be key.
Should Chair Powell lean hawkish or signal a prolonged hold, gold could face renewed pressure. Any hint of policy normalization could firm the dollar and temper bullion’s appeal. Still, dovish undertones or concern over inflation’s durability could reinforce the metal’s support near technical pivot levels.
