Gold dips on Fed reaction; XAU/USD tips towards $1,940 on rising inflation outlook

Gold took a step down on reaction to the Federal Reserve's (Fed) rate call for Wednesday, with the XAU/USD testing the waters in the $1,940.00 region.

The Fed kept its benchmark interest rate at 5.5% as investors broadly anticipated, but the US central bank saw an uptick in their forward-looking inflation expectations.

Markets are seeing the 1-year Fed inflation expectations lifting half a percent to 5.1% from the previously recorded 4.6%.

The XAU/USD fell off the $1,946.00 level after the release, declining into challenge range of the $1,940.00 handle.

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