Gold (XAU/USD) is pulling back from all-time highs around $3,703 as market participants wait with bated breath for the Federal Reserve’s interest rate decision, set to offer a 25 basis point reduction. As of writing, the metal trades at about $3,675, pushed lower by a minor US Dollar rebound but underpinned by muted Treasury yields and robust safe-haven buying. Although profit-taking has pulled recent advances, the overall bullish trend is intact, with the Fed’s policy expectation and Powell’s comment guiding whether Gold resumes its advance towards fresh highs or gets into a sharper correction.

KEY LOOKOUTS

• Everyone expects a 25 bps cut, but even suggestions of more or quicker easing could have a big influence on Gold’s direction.

• The tone of Fed Chair regarding inflation, labor market conditions, and future policy direction will be essential for determining market sentiment.

• Levels of immediate support are $3,650–$3,645, and resistance levels are $3,675–$3,700, with $3,703 as the primary breakout level.

• Geopolitical uncertainties and economic uncertainty remain the drivers of Gold’s bullish thesis in spite of interim corrections.

Prices of Gold are settling back from their new all-time highs at around $3,703, with market players waiting for the Federal Reserve’s interest rate decision for the next directional signal. The precious metal is at around $3,675, down fractionally on the day as investors take profits and the US Dollar demonstrates mild firmness. Market expectations are strongly biased towards a 25 basis point rate reduction, but focus will be on Fed Chair Jerome Powell’s direction and the revised economic projections for hints on the speed of future easing. Even as the recent pullback from Gold exists, its broader bullish trend continues to be underpinned by safe-haven demand, tame Treasury yields, and escalating geopolitical and economic uncertainties.

Gold drops from record highs of about $3,703 as traders wait for the Fed’s rate move, with markets penciled in for a 25 bps cut. XAU/USD is trading at $3,675, with Powell’s direction set to guide the next major move in prices. The pullback notwithstanding, safe-haven demand still remains bullish for the overall outlook.

• Gold pulls back from record highs of about $3,703 as traders hold on for the Fed’s policy move.

• XAU/USD is trading at about $3,675, down close to 0.35% on the day.

• The markets are forecasting a 25 bps Fed rate cut, bringing the funds rate down to 4.00%-4.25%.

• Powell’s press conference and new economic projections will be driving market sentiment.

• Support in the immediate vicinity is $3,650–$3,645 and resistance of $3,675–$3,700.

• Safe-haven buying, muted yields, and geopolitical tensions support Gold’s overall uptrend.

• A dovish Fed may initiate new highs, while caution would risk a more significant correction.

Gold is giving a breather to its record-breaking rally, as investors now turn their attention to the Federal Reserve’s interest rate decision. The precious metal’s price has been boosted by hopes of looser US monetary policy, ongoing global uncertainties, and healthy safe-haven demand. Investors are keeping a close eye on how the Fed will weigh slowing job growth and sticky inflation since its policy framework will be instrumental in determining the market direction for the remainder of the year.

XAU/USD DAILY CHART PRICE

SOURCE: TradingView

Aside from monetary policy, Gold is underpinned by broader macroeconomic and political variables. The continued geopolitical tensions, worry about world growth, and increased uncertainty of US politics continue to uphold its status as a safe-haven asset. With major banks expecting several rate cuts through the end of the year, the overall background still supports Gold, and thus the Fed’s guidance is a key event for market players in focus.

TECHNICAL ANALYSIS

Gold (XAU/USD) is steadying around $3,675 after pulling back from the all-time high of $3,703. Initial support is found at $3,650–$3,645, corresponding to the 50-period SMA on the 4-hour chart, while the resistance is at $3,675–$3,700. A move below support would risk exposing the $3,620 area, while a rebound might force a retest of the all-time high, with possible extension to $3,750. The RSI at 51 indicates neutral momentum after cooling from overbought, while the MACD reflects declining bullish strength, indicating the Fed’s move is likely to be the catalyst for the next big move.

FORECAST

If the Fed communicates a dovish tone with the broadly anticipated 25 bps rate cut, Gold may get back into gear and test the record high of $3,703. A firm breakdown above this level may set the path towards $3,750 and beyond, backed by safe-haven demand, muted yields, and forecasts of additional policy accommodation. Increased geopolitical risk or indications that the US economy is weakening can further drive buying interest.

Conversely, if Powell’s advice is conservative or reduces expectations on the extent of future cuts, Gold could attract selling pressure again. Breaking below the $3,650 support area could reveal lower levels around $3,620 and the psychological $3,600 level. A sharper US Dollar recovery or a reduction in geopolitical tensions could also deter bullion, bringing in a longer-term corrective phase before any new rally attempt.