Gold (XAU/USD) prices continued its consolidative price movement near record highs through the first half of the European session (3/19) on Wednesday as investors braced ahead of the FOMC policy update. The Federal Reserve (Fed) will announce its decision later during the US session and is widely expected to keep the federal funds rate unchanged in the current range of 4.25% to 4.50%. Hence, the focus will remain on the accompanying policy statement and the latest economic projections, which include the so-called dot plot. Apart from this, Fed Chair Jerome Powell's comments at the post-meeting press conference will be looked upon for cues on the future path of interest rate cuts. This will influence the US Dollar (USD) price dynamics and provide some meaningful impetus to the non-yielding yellow metal.

Ahead of the key central bank event risk, some repositioning trade helped the US Dollar (USD) to gain some positive traction and snap three consecutive days of decline to the lowest level since October touched on Tuesday. This, in turn, is seen acting as a headwind for Gold prices, though the near-term bias seems tilted towards bullish traders. Market participants now seem convinced that the Fed will cut borrowing costs multiple times this year amid concerns about a tariff-driven US economic slowdown. Moreover, uncertainty over US President Donald Trump's aggressive trade policies and geopolitical risks should continue to underpin demand for the safe-haven bullion. This, in turn, suggests that any corrective pullback might still be seen as a buying opportunity and is more likely to remain limited. (Newsmaker23)

Source: FXstreet