Gold Price Forecast: XAU/USD buyers lack conviction as Fed policy decision looms
- Gold buyers lack conviction above $4,300 early Wednesday as the Fed event risk looms.
- The US Dollar holds the retreat amid US-Iran peace deal optimism, profit-taking ahead of new Fed Chair Warsh’s presser.
- Technically, Gold retains its downside bias whilst below the 21-day SMA near $4,400.
Gold is holding its five-day winning streak near $4,350 in Asian trading on Wednesday, but remains within this week’s familiar range. Traders look forward to the all-important US Federal Reserve (Fed) monetary policy decision for a clear directional impetus.
Gold: All eyes on Warsh-led Fed verdict
This is the critical event risk this Wednesday, as it’s the first FOMC meeting under new Fed Chairman Kevin Warsh; hence, his words will carry more weight than the interest rate decision itself.
Markets will closely scrutinize Warsh’s view on inflation and growth alongside liquidity conditions and the balance sheet.
Additionally, the Fed rate announcement will be accompanied by the updated Summary of the Economic Projections (SEP), the so-called dot plot chart. Median forecasts now project a shift away from a 25-basis-point (bps) rate cut this year to a 25-bps rate hike.
Meanwhile, the US central bank is widely expected to hold the key interest rate in the range of 3.5% to 3.75% on Wednesday.
Gold could come under renewed pressure if the Fed delivers a hawkish message. A stronger focus on inflation, expectations for a rate hike later this year, or signals of balance sheet tightening could reinforce a higher-for-longer policy outlook and drag Gold back toward the key $4,000 level.
Conversely, if Kevin Warsh supports holding rates steady, dissents in favor of a cut, or emphasizes growth risks over inflation concerns, the US Dollar could weaken significantly. Such an outcome may fuel a further Gold recovery toward the 200-day Simple Moving Average (SMA) just above the $4,450 level.
In the lead-up to the Fed event risk, however, Gold could see a brief profit-taking pullback, particularly after the recent recovery from year-to-date (YTD) lows near $4,020. Traders may refrain from placing fresh bets on the bullion before Warsh takes the rostrum at his debut post-policy meeting press conference later on Wednesday.
Additionally, markets also eagerly await details of the interim peace agreement between the United States (US) and Iran, with the deal likely to be signed on Friday at the G7 Summit in Geneva.
US President Donald Trump said that it will rule out a nuclear weapon for Tehran, and a US official noted that it will allow Iran to sell oil upon signing.
Markets will also assess a fresh report published by the World Gold Council (WGC) on Tuesday, which showed that a record 45% of the reserve managers surveyed expect to increase their own institutions' gold holdings over the next 12 months.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,333.21. The metal remains under clear downside pressure as it holds below the 21-day simple moving average (SMA) at roughly $4,402, with the longer-term 200-day, 50-day and 100-day SMAs stacked well above price near $4,461, $4,565 and $4,746 respectively, reinforcing a bearish near-term bias. The Relative Strength Index (RSI) around 44 stays below the midline, hinting that sellers retain the upper hand even as the recent slide shows some signs of stabilizing.
On the topside, initial resistance emerges at the 21-day SMA around $4,402, where a daily close back above would be needed to ease immediate bearish pressure. Further up, the 200-day SMA near $4,461 is the next relevant cap, followed by the 50-day SMA around $4,565, while the 100-day SMA at about $4,746 defines a broader resistance zone that would likely limit recoveries unless a more sustained bullish reversal develops.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
FOMC Press Conference
The press conference is about an hour long and has two parts. First, the Chair of the Federal Reserve (Fed) reads out a prepared statement, then the conference is open to questions from the press. The questions often lead to unscripted answers that create heavy market volatility. The Fed holds a press conference after all its eight yearly policy meetings.
Read more.Next release: Wed Jun 17, 2026 18:30
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
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.
