Gold on pause awaiting the Fed’s verdict
|Gold is trading in a holding pattern near 4,200 USD per ounce on Tuesday, as markets remain in a state of suspended animation ahead of the Federal Reserve’s policy decision.
While a 25-basis-point rate cut is almost fully priced in, investors will scrutinise the updated economic projections and Chair Jerome Powell’s subsequent press conference for clarity on the policy trajectory into 2026 and beyond.
Market-implied probabilities currently assign an 87% likelihood to a cut today. However, expectations for future easing have moderated, with just two rounds of cuts now anticipated for next year, down from three a week ago.
Before the Fed announcement, traders will also assess the latest JOLTS job openings data for additional labour market insights.
In a supportive development for the metal, the People’s Bank of China expanded its gold reserves for the 13th consecutive month, bringing its total holdings to 74.12 million troy ounces.
Technical analysis: XAU/USD
Four-hour chart
On the H4 chart, XAU/USD continues to consolidate in a sideways range following its late-November advance. The price is currently trading below the middle Bollinger Band, suggesting a gradual loss of bullish momentum. The upper band has flattened, confirming the consolidation phase within the 4,163–4,240 USD zone.
Support at 4,163 USD remains critical, with the price having rebounded from this level multiple times in recent sessions. A decisive break below would open the way to the next significant support near 4,136 USD, which aligns with the lower Bollinger Band.
Resistance is clearly defined at 4,240 USD. A sustained move above this level would provide the first strong signal for a renewed upward move, initially targeting 4,265 USD.
One-hour chart
On the H1 chart, gold shows a near-term bearish bias after failing to break above resistance at 4,240 USD. The price is consistently positioned below the middle Bollinger Band, with the lower band reinforcing the selling pressure. Local support has solidified around 4,163 USD, a level tested repeatedly in recent trading.
The Stochastic oscillator remains near oversold territory, indicating weak momentum, though a clear reversal signal has yet to emerge.
Should buyers defend the 4,163 USD support and propel the price back above the middle Bollinger Band, a recovery toward 4,200 USD and later 4,240 USD would become likely. Conversely, a breakdown below 4,163 USD would signal a deeper corrective move toward 4,136–4,100 USD.
Conclusion
Gold remains in a state of cautious equilibrium as traders await the Fed’s policy signal and updated economic forecasts. While underlying physical demand – particularly from central banks – continues to provide a supportive floor, the technical picture reflects consolidation with a slight near-term bearish tilt.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.