FOMC has passed, must read before trading XAUUSD!
Here is what you need to know…
Gold prices are trading around $2,600, struggling to recover from a monthly low of $2,580 as markets digest a hawkish Fed rate cut decision and a strong US Dollar.
Key Market Drivers
Fed’s Hawkish Rate Cut
Despite reducing rates by 25 bps, the Fed signaled only two rate cuts in 2025, fewer than expected.
Inflation projections increased to 2.5%, reflecting caution under the incoming Trump administration’s potential inflationary policies.
Strong USD and Treasury Yields
The DXY hit a two-year high of 108.27, boosted by rising bond yields, which further weaken Gold’s appeal as a non-yielding asset.
Central Bank Announcements
Market sentiment remains cautious ahead of BoJ and BoE decisions, though the Fed’s outlook remains the key focus.
Upcoming US Data
Releases like Q3 GDP revisions, Jobless Claims, and PCE inflation are expected to add further clarity to Gold’s direction.
Technical Outlook:
- Resistance:
$2,650: 21-day SMA, a critical upside barrier.
- Support:
$2,583: Monthly low, immediate downside target.$2,555: November 15 low, secondary support.
Bias: Bearish
Gold faces strong headwinds from a hawkish Fed, robust USD, and rising bond yields.
Bearish Scenario: A break below $2,583 could lead to further declines toward $2,555 and $2,537.
Outlook: Gold remains a “sell-on-bounce” opportunity, with targets at lower support levels. Stay tuned for upcoming US economic data to gauge potential market shifts.
I’m expecting a continuation towards the down side at around 2620-2623. Potentially taking it down to our Previous Day Low of 2583.
