Gold price dip slightly as the US Federal Reserve (Fed) maintained interest rates. The Fed omitted prior inflation language, signaling a shift towards keeping rates unchanged. XAU/USD fluctuated within the $2,750 – $2,740 range as Fed Chair Jerome Powell addressed the press.
Fed Interest Rates and Powell’s Statements on Economic Policies
During the press conference, Powell confirmed no recent discussions with US President Donald Trump regarding gold price analysis and Fed interest rates. He refrained from commenting on political matters or policies affecting the XAU/USD outlook.
Additionally, Powell stated that monetary policy remains less restrictive than before. He emphasized that the Fed is not rushing into any rate adjustments. The Federal Open Market Committee (FOMC) continues to monitor fiscal and trade developments initiated by the current administration.
Powell clarified that the Fed does not follow a pre-set course on interest rates. When questioned about the March meeting, he reiterated that no immediate action is planned.
Gold Market Reaction to Fed Decision
Following Powell’s remarks, XAU/USD remained volatile but stayed near $2,750. Investors now focus on key economic indicators such as GDP data, employment figures, and the Core Personal Consumption Expenditures (PCE) Price Index.
Market Movers Impacting Gold Prices
The Federal Reserve unanimously decided to keep rates at the 4.25% – 4.50% range. It also eliminated inflation-related statements, leading traders to expect prolonged higher interest rates.
- The Fed emphasized that economic growth remains strong.
- The unemployment rate is stable, and labor market conditions are robust.
- The Fed reaffirmed its commitment to maintaining economic stability.
The US 10-year Treasury yield increased by one basis point to 4.549%, limiting gold’s potential gains. Meanwhile, the US Dollar Index (DXY) rose by 0.12% to 108.04, applying pressure on gold prices.
The CME FedWatch Tool suggests that investors anticipate 50 basis points of rate cuts by 2025, with the first reduction expected in June.
XAU/USD Technical Outlook
Gold’s long-term bullish trend remains intact despite minor declines post-Fed decision. XAU/USD hit a daily low of $2,744 before recovering some losses. Analysts anticipate a potential ‘bullish harami’ pattern, hinting at a possible price increase.
- If gold surpasses $2,785, the next resistance level is $2,790, followed by $2,800.
- If prices drop below $2,750, the next support is at $2,730, with a further decline exposing $2,700.
Conclusion
Gold continues to navigate economic uncertainties as the Fed maintains its current stance. Investors remain cautious, awaiting key economic data releases. For more insights on daily gold updates, visit Daily Gold Signal. Stay informed with our detailed gold market analysis.
