Will Gold sell the Fed news?

• Gold holds steady near its all-time high as data favors a rate cut.

• Another bounce likely but caution warranted as overbought signals emerge.

Gold started the week with quiet sideways action, hovering just below its all-time high of 3,674, reached last Tuesday. U.S. CPI inflation figures held steady at elevated levels last week, in line with expectations, but initial jobless claims surged to their highest level in two years, with President Trump placing his bets for a bold rate cut during an interview on his way to Washington on Sunday.

Whether the Fed will surprise investors with a double 50bps reduction on Wednesday remains uncertain, as futures markets still assign low odds. A more aggressive cut, accompanied by dovish guidance signaling further back-to-back easing, could ignite the next bullish cycle in the precious metal, bringing the 3,690–3,735 zone into play. The 3,800 round number could follow, and a breakout there might pave the way toward the psychological 3,900 level and eventually the all-important 4,000 mark.

The tiny candlesticks that emerged after the almost vertical rally could be just a pause in the uptrend, though there are some concerns that the path higher could become rocky as overbought signals are still in place. The latter increases speculation that investors may engage in profit-taking and sell the Fed news near fresh record highs. Should prices slip below 3,590–3,600, the 20-day simple moving average (SMA) at 3,530 and the 3,500 support level could step in. Failure to hold there could deepen the sell-off toward the 50-day SMA at 3,435, which also coincides with the upper band of the previous sideways range.

In summary, gold’s short horizontal consolidation could evolve into a fresh bullish wave, potentially challenging the 3,690–3,735 area. Yet, whether the bulls can sustain a steeper rally remains to be seen. Alternatively, a close below 3,590–3,600 could hand control back to the bears.