$XAUUSD ‌

Market Cautious on The Fed, Gold Weakens Amid Middle East Conflict

Gold Focus:

Inflation risk from energy price surge due to Middle East conflict
Expectations for elevated global interest rates despite weakening US dollar
Wednesday, March 18, 2026 – Gold prices fell to around US$5,001 per troy ounce at the start of trading session, as market participants adopted a wait-and-see stance ahead of the Federal Reserve's monetary policy decision. Pressure on gold is occurring amid rising concerns that the energy price surge from geopolitical conflict could trigger inflation and prompt central banks to maintain elevated interest rates longer. Although conflict in the Middle East typically supports safe-haven demand.

From a geopolitical perspective, the conflict between the United States and Israel against Iran, now in its third week, continues to disrupt global energy trade. World oil prices rose more than 2% and remained above US$$100 per barrel, as distribution through the Strait of Hormuz, a key global energy supply route, faced disruptions. Conflict escalation increased following reports of Israeli airstrikes that killed a senior Iranian security official, amplifying risks of prolonged conflict and strengthening market concerns about energy-based inflation pressures.

From a policy perspective, the market expects the Federal Reserve to maintain its benchmark interest rate in the range of 3.5–3.75% in the meeting whose results will be announced Wednesday local time. Market participants' focus is not only on the interest rate decision, but also on inflation projections and the central bank's outlook on the conflict's impact on the global economy. Meanwhile, the market will also monitor further releases of US economic data as indicators of the direction of inflation and interest rates ahead.

Technically, the nearest support level for gold prices is in the range of $4,971 to $4,936, while the nearest resistance lies at $5,042 to $5,078. If selling pressure increases, deeper support is seen at $4,865, while medium-term resistance is in the area of $5,149.

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