Gold Price Forecast: XAU/USD retreats from record highs ahead of Fed’s decision

XAU/USD Current price: $5,291

• United States President Donald Trump claimed he is comfortable with a weak US Dollar.
• US Treasury Secretary Scott Bessent reaffirmed the US preference for a strong USD.
• XAU/USD retreated from fresh record highs, bullish run not done yet.

Spot Gold is up for the eighth consecutive day, extending its record run to yet another all-time high of $5,311 on Wednesday. The US Dollar (USD) collapsed early in the day following comments from United States (US) President Donald Trump. Trump said he thinks the value of the USD is “great,” fueling the sell-off of the American currency.

The currency stabilized during European trading hours and recovered some ground after Wall Street’s open, following US Treasury Secretary Scott Bessent's comments, reaffirming the US preference for a strong dollar. Bessent also clarified that the US is “absolutely not” intervening in USD/JPY, further helping the battered Greenback. Earlier in the week, market talk about a potential US intervention in the currency markets to support the Japanese Yen (JPY) triggered a bout of USD selling.

XAU/USD currently hovers around $5,280, as market participants await the Federal Reserve (Fed) monetary policy announcement. The central bank is widely anticipated to maintain the fed funds rate unchanged in the range of 3.5%-3.75%. Chairman Jerome Powell will offer a press conference following the announcement, and speculative interest hopes to get some clues on future monetary policies from his words.

Other than that, President Trump repeated once again that he will name the next Fed Chair “soon.” He may choose to do it today, but there’s no indication of when he will do it. The final three candidates are: BlackRock's chief bond investment manager, Rick Rieder, Fed Governor Christopher Waller, and former Fed Governor Kevin ‍Warsh. It is worth remembering that Trump’s nominee needs to be confirmed by the Senate. Still, once the name is out, market players will run to price in whatever they believe the next Chair will do with rates.

 XAU/USD short-term technical outlook

The near-term picture maintains the risk skewed to the upside for XAU/USD. In the 4-hour chart, the pair trades above all its moving averages, with the 20-period Simple Moving Average (SMA) climbing above the 100- and 200-period SMAs, and acting as dynamic support at $5,119.30. Meanwhile, technical indicators have stabilized in overbought levels after correcting extreme conditions, in line with the absence of selling interest. The 100-period SMA at $4,734.21 acts as a longer-term line in the sand for the ongoing rally.

In the daily chart, XAU/USD is extremely overbought, yet there are no signs of a directional change. Technical indicators keep heading north far into positive territory, as the pair extends its advance beyond all its moving averages. The 20-day Simple Moving Average (SMA) climbs above the 100- and 200-day SMAs, highlighting firm bullish momentum, with the shorter SMA standing at $4,685.19.

(The technical analysis of this story was written with the help of an AI tool.)