Gold Edges Higher In Cautious Trade As Fed Meeting Looms

(RTTNews) - Gold held steady above $5,000 an ounce on Tuesday as investors watched the ongoing geopolitical developments in the Gulf region and braced for a slew of central bank decisions, including the U.S. Federal Open Market Committee (FOMC) meeting scheduled for Wednesday.

Spot gold edged up by 0.2 percent to $5,018.64 an ounce while U.S. gold futures were up 0.4 percent at $5,023.

A stronger dollar capped potential gains as the U.S.-Israel war with Iran entered day 18. For the first time, Iran successfully targeted oil and gas production facilities, rather than just refineries, terminals and storage.

A drone attack has sparked a fire at the Fujairah Oil Industry Zone in the United Arab Emirates (UAE), but reports suggest that there were no casualties. The energy facility is located about 150km (93 miles) east of Dubai.

Loud explosions and air defense interceptions were reported across the UAE, Saudi Arabia and Qatar today.

The Israeli military said it had begun a "wide-scale wave of strikes" across Iran's capital and was also stepping up strikes on Iran-backed Hezbollah targets in Lebanon.

Meanwhile, several U.S. allies, including Germany, Spain, Italy, Australia and Japan have declined President Donald Trump's request to secure the Strait of Hormuz, a vital artery for a fifth of global energy shipments. The U.K. and France said they are willing to discuss options.

As inflation risks mount, investors now look ahead to the monetary policy announcements from central banks, including the Federal Reserve, the European Central Bank and the Bank of England.

The Federal Reserve's policy decision is scheduled for Wednesday, with economists expecting the central bank to leave interest rates unchanged.

Market participants will closely watch updated economic projections and comments from Fed Chair Jerome Powell for additional clues on the Fed's rate trajectory.

The Bank for International Settlements on Monday urged central banks not to rush reactions to the Iran crisis-driven spike in global energy prices, calling it a textbook case of when to "look through" a supply shock.