Gold Volatile After Fed Holds Rates, Hawkish Dots

The Federal Reserve held its benchmark interest rate steady at 3.50%-3.75% during Wednesday's meeting, as widely expected. However, the accompanying Summary of Economic Projections (SEP) showed policymakers now expect inflation to remain above the 3% threshold, a hawkish signal.

Gold (XAU/USD) reacted with sharp volatility, swinging within a range of approximately $4,330 to $4,280. Despite the intraday swings, the precious metal managed to hold on to earlier gains, reflecting mixed market sentiment toward the outlook for monetary policy.

Traders are now pricing in a higher-for-longer rate environment, which typically pressures non-yielding assets like gold. Yet, persistent inflation concerns may also support gold as a hedge.