The price of gold is holding steady below a two-week high, trading at $1,930 in the early hours of Wednesday’s Asian session. Ahead of the US Federal Reserve’s (Fed) decision, rising US Treasury yields are putting pressure on the price of yellow metal.

The rising US Treasury note yields are keeping the US Dollar Index (DXY) stable at 105.10. The US 10-year Treasury note’s yield is currently at 4.36%, which is the highest level in 16 years and puts pressure on gold prices.

The Fed is anticipated to maintain rates in September in the current range of 5.25%–5.50% but to maintain them higher for an extended period in light of recent data that demonstrated inflation’s resilience.

The likelihood of another rate hike decreased at the November and December meetings, according to the CME FedWatch Tool.

Despite the importance of the Fed’s decision, market participants will pay particular attention to the “dot plots” to determine the predicted interest rate trajectory. The Fed’s median projections in the most recent Summary of Economic Projections (SEP) suggest that rates may peak at 5.6%.

US Treasury Secretary Janet Yellen stated on Tuesday that, given that the economy was experiencing full employment, it was necessary for US growth to slow down to a pace more in line with potential growth in order to return inflation to target levels.

In addition, Yellen stated, “I believe the Chinese would probably use the policy latitude they have to try to avoid a slowdown of significant proportions. China’s economic problems can have an impact on the US.

The decision made at the US Federal Reserve meeting on Wednesday will be eagerly watched by traders later in the North American session.

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