Spot gold fell 0.2% to $3,383.02 per ounce, while U.S. gold futures declined 0.2% to $3,400.62 per ounce.

Gold prices retreated on Wednesday as focus shifted to the monetary policy of the U.S. Federal Reserve amid ongoing tensions between Iran and Israel.

Spot gold fell 0.2% to $3,383.02 per ounce, while U.S. gold futures declined 0.2% to $3,400.62 per ounce.

The Federal Reserve is set to reveal its decision regarding the benchmark interest rate amid mounting political pressure from U.S. President Donald Trump to lower rates to bolster economic growth.

Data from CME Group’s Fedwatch tool indicates a 99.9% probability that the Fed will maintain interest rates at the current 4.25% to 4.5% range.

Reuters reported, citing an analyst, that traders are not making any significant purchases ahead of the Federal Reserve’s interest rate decision later on Wednesday, while more bullish equity market bets are also weighing on the bullion.

The S&P 500 and Nasdaq futures rose marginally in premarket trading.

However, the safe-haven appeal of gold remains as Israel and Iran continued to target each other with drones and ballistic missiles.

Concerns rose that the conflict, which is on its sixth day, could escalate further as the U.S. reportedly moved more military assets to the Middle East.

On Tuesday, Citi trimmed its short-term and long-term price targets for gold, forecasting that the precious metal’s prices could drop below $3,000 per ounce by late 2025 or early 2026, hurt by declining investment demand and an improving global growth outlook.

However, according to Reuters, analyst Hamad Hussain says strong buying from central banks could provide a floor at $3,000.

The SPDR Gold Shares ETF has gained 27% this year.

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