Gold Price Forecast: XAU/USD sellers take a breather ahead of Fed Minutes


  • Gold price pauses its losing streak before the Fed Minutes on Wednesday.    
  • The US Dollar holds the upside alongside Treasury yields amid China woes and Mid-East risks.
  • Gold price looks set to bounce off key $2,630 support amid bullish daily RSI.

Gold price is taking a breather in the lead-up to the release of the Minutes of the US Federal Reserve (Fed) September policy meeting due later on Wednesday.

Gold price eyes Fed Minutes for fresh impulse

In Wednesday’s Asian trading, Gold price is attempting a tepid bounce, snapping a five-day downtrend. Gold traders eagerly await the Fed Minutes to assess the scale of the next interest rate cut, especially after Friday’s strong US Nonfarm Payrolls data took bets for a 50 basis points (bps) rate reduction off the table.  

The Fed Minutes of the September meeting will likely show discussions about the labor market and inflation outlook, as well as, on the way forward on the interest rates. Lately, Fed policymakers continued to deliver dovish messages at their respective appearances, although maintaining a non-committal stance on the size of the next rate cut.

Bets for a smaller Fed rate cut have already weighed on Gold price so far this week, as buyers now seem to lack a bullish conviction due to mounting Chinese economic concerns on the lack of further stimulus announced by China. The Dragon Nation is the world’s top yellow metal consumer, and hence, rising economic worries could weigh over the physical demand for Gold from Chinese consumers.

The safe-haven Gold price, however, continues to find a ‘dip-buying’ demand, as escalating tensions between Israel and Iran raise risks of the conflict turning into a wider regional war.

Reuters reported early Wednesday, Israel Prime Minister Benjamin Netanyahu said Israeli airstrikes had killed two successors to Hezbollah's slain leader, as Israel expanded its ground offensive against the Iran-backed group with a fourth army division deployed into south Lebanon.”

Ahead of the Fed Minutes, Gold price could find some trading incentives from speeches by Fed Vice Chair  Philip Jefferson and San Francisco Fed President Mary Daly. Fed official Jerfferson said earlier on, the decision for a 50 bps rate cut in September “was timely and consistent" with the Fed's two mandates of attaining 2% inflation and maximum employment.

Gold price technical analysis: Daily chart

Gold price outlook remains constructive from a short-term technical perspective even though sellers cracked the key static support of $2,630 on a daily closing basis.

The 14-day Relative Strength Index (RSI) is in a recovery mode while holding above the midline, currently near 56. This suggests that a Gold price rebound could be in the offing.

On the downside, the 21-day Simple Moving Average (SMA) at $2,619 must be defended to revive the upward trajectory to record highs.

A failure to do so will recall sellers, triggering a fresh sell-off in Gold price toward the $2,600 threshold. Additional downside pressure could target the September 20 low of $2,585.

On the flip side, Gold price needs a daily candlestick closing above the $2,650 psychological barrier to take on the lifetime high of $2,686 again.

Ahead of that, the strong resistance near $2,670 will come into play.

(This story was corrected on October 9 at 06:30 GMT to say that "Gold price outlook remains constructive from a short-term technical perspective even though sellers cracked the key static support," not buyers.)

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.

Read more.

Next release: Wed Oct 09, 2024 18:00

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.

 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD holds firm near 1.1100 ahead of US NFP, Powell

EUR/USD holds firm near 1.1100 ahead of US NFP, Powell

EUR/USD is holding ground near 1.1100 in the early European morning on Friday. Recession fears due to a global trade war lft Fed rate cut expectations, exacerbating the US Dollar's pain while keeping the pair afloat. Traders look to the US NFP report and Fed Chair Powell's speech for fresh directives.  

EUR/USD News
GBP/USD retakes 1.3100 as US NFP data looms

GBP/USD retakes 1.3100 as US NFP data looms

GBP/USD is defending minor bids above 1.3100 in early Europe on Friday. Persistent US Dollar weakness on recession fears and dovish Fed expectations underpin the pair as traders look forward to the US payrolls data and Fed Chair Powell speech for placing fresh bets. 

GBP/USD News
Gold price hovers near $3,100; bullish bias remains ahead of US NFP report

Gold price hovers near $3,100; bullish bias remains ahead of US NFP report

Gold price meets with a fresh supply on Friday, though the downside potential seems limited. Trump’s tariffs-inspired risk-off mood might continue to act as a tailwind for the precious metal. Fed rate cut bets weigh on the USD and should contribute to limiting losses for the XAU/USD pair.

Gold News
XRP finds new lifeline as Coinbase Derivatives eyes XRP futures on April 21

XRP finds new lifeline as Coinbase Derivatives eyes XRP futures on April 21

Ripple price reclaims the $2.00 support level and trades at $2.06 at the time of writing on Friday in the wake of a drawdown to $1.96 during Thursday’s session. Traders continue to exercise caution after Trump’s tariffs hit 100 countries, as per a CryptoQuant report.

Read more
Trump’s “Liberation Day” tariffs on the way

Trump’s “Liberation Day” tariffs on the way

United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs. 

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025