The key event so far this week has been the Fed’s on interest rates. As expected, there was no rate cut, despite pressure from President Donald Trump and some domestic opposition. The has continued to strengthen following the announcement, which is putting pressure on prices. If this trend continues, gold may remain under pressure in the near term.
Attention now shifts to Friday’s . If the data comes in stronger than expected, it could give the US dollar more support and reinforce the Fed’s cautious approach.
Meanwhile, central banks have been steadily increasing their gold reserves this year, with Kazakhstan, Turkey, and Poland among the most active buyers.
Gold: Arguments for a Deeper Rebound
Right after the Fed’s announcement, gold prices dropped sharply. This move could break the recent consolidation range and lead to a test of the $3200 level. The market took the Fed’s message as hawkish, even though two board members—Michelle Bowman and Christopher Waller—voted against the majority for the first time in 30 years. Donald Trump appointed both and have openly supported continuing the rate-cut cycle.
Besides the Fed’s support for a stronger US dollar, progress on US trade agreements is also weighing on gold. These developments are lowering risk in the market and reducing investor demand for safe-haven assets like gold.
Since the start of the year, gold has delivered a 26% return in US dollar terms. A pullback at this stage could be seen as a healthy correction within a broader uptrend. High prices are already affecting demand in sectors like jewelry, especially in Asian markets, where buyers seem to be holding back in anticipation of a possible price dip.
Looking ahead, it would likely take a combination of factors for supply pressures to outweigh demand and shift the balance in the gold market.
The Fed remains hawkish, leading markets to scale back expectations from two rate cuts to one by year-end.
Donald Trump signs new trade agreements and pushes for peace talks between Kyiv and Moscow.
The US dollar continues to strengthen amid policy and geopolitical developments.
However, it is essential to keep in mind that gold remains in an overall uptrend, so any declines are likely part of a broader corrective phase. Market attention should also turn to the extension of secondary sanctions on countries buying Russian oil, with the US already announcing a 25% tariff on imports from India.
Gold Continues to Move in a Sideways Trend
Gold prices have entered a consolidation phase between $3270 and $3470 per ounce. Given the factors mentioned earlier, there is now a possibility of further downward movement, which could lead to a test of the lower end of this range.
If gold breaks below this range, it could open the path toward lower levels, with the next key target just above the $3100 mark. On the other hand, a move above $3500 would invalidate the bearish scenario and likely pave the way for new all-time highs.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk is at the investor’s own risk. We also do not provide any investment advisory services.
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