Gold edges lower ahead of Fed decision on interest rates

Gold prices edged lower on Wednesday, with market participants closely watching the Federal Reserve's policy meeting for indications on inflation and future U.S. interest rate movements. The dollar's firm stance against other currencies also contributed to the dip in bullion prices.

Spot gold saw a minor decrease, while U.S. gold futures for August delivery also fell. The Federal Reserve was widely expected to conclude its two-day policy meeting by holding interest rates steady. However, market analysis indicated a significant probability of at least a 25-basis-point increase later in the year, with September also showing a high chance of a rate hike.

Meanwhile, the Bank of England and the Bank of Japan were also anticipated to keep their rates unchanged. The strengthening dollar made gold, priced in greenbacks, more expensive for international buyers. In other news, U.S. Central Command reported Iran's attempted ballistic missile attack on U.S. forces in the Middle East, which were successfully intercepted. Oman has proposed a plan to manage the Strait of Hormuz, a proposal the U.S. official rejected.

Financial analysts have adjusted their forecasts, with Commerzbank lowering its year-end gold price prediction to $4,500 per troy ounce and expecting silver to reach $67 per troy ounce. Other precious metals like silver and platinum saw slight gains, while palladium experienced a minor decline.

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Gold prices inched lower on Wednesday as the dollar held firm and market participants awaited the Federal Reserve's policy decision for clues on inflation and the path of U.S. interest rates.