Gold price (XAU/USD) touches a fresh all-time peak, around the $3,039 region during the Asian session on Wednesday, though it lacks follow-through as traders opt to wait for the outcome of a two-day FOMC policy meeting.

The Federal Reserve (Fed) is scheduled to announce its decision later today and is expected to keep the federal funds rate unchanged at the current range of 4.25% to 4.50%. Hence, the focus will be on updated economic projections and Fed Chair Jerome Powell's comments at the post-meeting press conference. Investors will look for cues about the future rate-cut path, which, in turn, will influence the US Dollar (USD) price dynamics and provide some meaningful impetus to the non-yielding yellow metal.

Heading into the key central bank event risk, some repositioning trade assists the USD in recovering slightly from its lowest level since October touched on Tuesday and acts as a headwind for the Gold price. The downside, however, remains cushioned in the wake of the uncertainty over US President Donald Trump's aggressive trade policies and their impact on the global economic outlook.

Apart from this, the risk of a further escalation of geopolitical tensions in the Middle East continues to act as a tailwind for the safe-haven bullion and supports prospects for an extension of a multi-month-old uptrend. However, slightly overbought conditions on the daily chart might hold back traders from placing fresh bullish bets around the XAU/USD pair.

Source : Fxstreet