FX.co ★ XAU/USD, GOLD

Gold prices remained under pressure above $4,300 in early trading on Thursday, after recovering from a six-week low of $4,235, but failed to achieve a significant technical rebound. This followed the Federal Reserve's key monetary policy statement. The weakness in precious metals prices is primarily attributed to the Fed's decisive policy shift. The Fed unanimously voted to raise its benchmark interest rate by 25 basis points to a target range of 3.75% to 4%. Furthermore, the Fed's updated summary of economic projections (dot chart) indicated that the market anticipates at least one more rate hike later this year, while the Fed remains cautious about the path of monetary policy through 2027, with most officials expecting interest rates to remain unchanged. At the press conference following the meeting, Federal Reserve Chairman Kevin Warsh reaffirmed the Fed's commitment to achieving its 2% inflation target in due course, emphasizing that curbing inflation remains a priority and dashing market hopes for near-term monetary easing. This hawkish stance led to a dramatic shift in market expectations. While U.S. Treasury yields dipped slightly and the dollar's rally from multi-year highs paused, it still poses a significant obstacle to non-yielding gold. Adding to the woes, global oil prices plummeted overnight, offering only limited support to gold. Earlier reports indicated that Saudi Arabia was rerouting more crude oil through alternative routes, such as Oman, to circumvent fragile supply bottlenecks and thus alleviate short-term concerns about supply-side inflation. Furthermore, market expectations of a summit of world leaders to discuss the ongoing conflict in the Middle East boosted demand for safe-haven assets. However, market analysts believe the current rise in gold prices is merely a temporary rebound, as investors reassess their expectations regarding the tightening of global monetary policy.

Currently, the market's focus has shifted to upcoming international monetary policy decisions, particularly the Bank of Japan's meeting scheduled for Friday. This meeting could have significant spillover effects on global currency markets and directly impact gold prices, which are heavily influenced by the US dollar. Domestically, upcoming US economic data—including weekly initial jobless claims and existing home sales—are expected to generate further market volatility and test overall risk sentiment. Technically, the gold/US dollar pair (XAU/USD) is trading on the daily chart at around $4285.21. The slight downward trend remains intact, with the spot price having fallen below the 100-day simple moving average (around $4322.66) while barely remaining above the 50-day moving average (around $4282.50). Meanwhile, the 21-day moving average (around $4434.61) and the 200-day moving average (around $4540.22) are forming strong upside resistance, suggesting that further upward movement will encounter several structural resistance levels. Momentum indicators, such as the 14-day Relative Strength Index (RSI), are hovering near the neutral line at 44.07, indicating weak upside momentum rather than a fully oversold condition. This implies that a decisive break below the 50-day moving average could trigger a deeper decline.