Gold Price Forecast: Is the $5,000 level back in sight for XAU/USD?
- Gold snaps a two-day downtrend, as recovery gathers traction toward $5,000 on Wednesday.
- The US Dollar recovers from the overnight sell-off as rebalancing trades resume ahead of Fed Minutes.
- The 38.2% Fib support holds on the daily chart for now. What does that mean for Gold?
Gold recovers from weekly lows reached near $4,850 on Tuesday, as buyers make another attempt to regain the $5,000 threshold this Wednesday.
Gold looks to Fed Minutes for fresh impetus
Gold eagerly awaits the Minutes of the US Federal Reserve’s (Fed) January monetary policy meeting for fresh trading incentives, as liquidity and demand for the bright metal continue to remain low due to a week-long holiday break in China.
The January Fed Minutes will be closely scrutinized for fresh hints on the scope and timing of the interest rate cuts.
Markets continue to price in roughly 60 basis points (bps) of total cuts this year, according to the CME Group’s FedWatch Tool, as slowing inflationary prospects overshadowed solid jobs gains in the United States (US).
The recent commentaries from Fed policymakers also supported the market’s view for further rate cuts.
“Fed Governor Michael Barr said on Tuesday that another central bank interest rate cut could come somewhere well down the road amid ongoing risks to the US inflation outlook. Chicago Fed President Austan Goolsbee said that the Fed could approve "several more" interest rate cuts this year if inflation resumes a decline to the central bank's 2% target,” per Reuters.
The revival in the dovish sentiment surrounding the US central bank’s monetary policy stance seems to be supporting the recovery in the non-yielding Gold.
Additionally, markets remain wary as no deal is reached between the US and Iran, following the conclusion of the second round of talks in Geneva, rekindling some haven demand for Gold.
Iran’s Foreign Minister Abbas Araqchi said on Tuesday that Tehran has agreed with the US 'on guiding principles' for the deal.
However, the ongoing US Dollar (USD) strength, due to rebalancing, could keep the Gold price upside in check. That said, the focus will then turn toward Friday’s triple data bomb and the US Supreme Court’s verdict on President Trump’s tariffs for fresh direction on Gold.
Gold price technical analysis: Daily chart
The 21-day Simple Moving Average (SMA) rises above the 50-, 100- and 200-day readings, yet price holds just below the 21-day at $4,991.82, tempering immediate momentum. The 50-day SMA trends higher and offers nearby dynamic support at $4,673.02, while the longer SMAs continue to climb and reinforce a bullish broader bias. The Relative Strength Index (14) prints 52.29 (neutral) and edges higher, hinting at stabilizing momentum.
Measured from the $5,597.89 high to the $4,401.99 low, the 50% retracement at $4,999.94 caps rebounds, and a daily close above it would open the 61.8% retracement at $5,141.05. On pullbacks, the 100-day SMA at $4,382.06 defines a deeper floor, while the near-term tone would improve if the pair reclaims and holds above the 21-day average.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Next release: Wed Feb 18, 2026 19:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
