The gold price (XAU/USD) continues to hover near its all-time high during the European session on Wednesday. Traders remain cautious, awaiting the Federal Open Market Committee (FOMC) meeting minutes for insights into the Federal Reserve’s rate-cut trajectory. This decision will significantly influence the US Dollar (USD) and provide direction for the non-yielding yellow metal.
Key Takeaways for Gold Price
- Gold price consolidates near record highs as traders await FOMC minutes.
- Fed rate-cut expectations and global trade tensions support gold’s safe-haven appeal.
- Technical indicators suggest a bullish bias, with potential buying opportunities on pullbacks.
Market Context: Fed Rate Cuts and Trade Tensions
Expectations of further rate cuts by the Federal Reserve have kept the USD under pressure. Additionally, concerns over US President Donald Trump’s tariff plans and their potential to escalate global trade tensions continue to bolster gold’s safe-haven demand. The lack of significant selling pressure indicates that the path of least resistance for gold remains upward.
Recent economic data, including disappointing US Retail Sales figures and mixed inflation signals, suggest the Fed may cut rates in September or October. Fed Funds Futures indicate a 40 basis point rate cut by year-end, further limiting the USD’s recovery and supporting gold prices.
Technical Insights of Gold Price: Bullish Bias Intact
From a technical perspective, gold’s range-bound movement reflects a bullish consolidation phase following its recent surge to record highs. The Relative Strength Index (RSI) remains near overbought levels, signaling potential for further consolidation. However, the overall setup favors bullish traders, with any pullbacks likely to attract buying interest.
Key Support and Resistance Levels:
- Support: 2,925,2,925,2,900, 2,878−2,876,2,878−2,876,2,860-2,855, 2,834,2,834,2,815, 2,800,2,800,2,785-2,784.
- Resistance: $2,940-2,942 (record high).
A break above the $2,940-2,942 resistance zone could trigger fresh bullish momentum, extending the uptrend observed over the past two months.
Expert Opinions: Fed’s Inflation Target
San Francisco Fed President Mary Daly emphasized the need to maintain current borrowing costs until progress toward the 2% inflation target becomes evident. This cautious stance aligns with market expectations of delayed rate hikes, further supporting gold prices.
Conclusion: Focus on FOMC Minutes
The release of the FOMC meeting minutes will be pivotal in shaping gold’s near-term trajectory. Traders will scrutinize the minutes for clues on the Fed’s rate-cut path and its implications for the USD. Given the current market dynamics, gold’s bullish bias remains intact, with any corrective dips likely to attract buyers.
For more insights and daily updates on gold prices, visit Daily Gold Signal and Daily Gold Updates.
