Gold price remains strong ahead of Fed interest rate decision

Gold prices remain near multi-month highs as traders await the Federal Reserve’s interest rate decision. Despite modest losses during the early European session on Wednesday, the price action remains strong in gold. The ongoing softness in US Treasury bond yields and the US Dollar supports gold, limiting its downside. Concerns about US President Donald Trump’s tariff policies also support the precious metal.

Fundamental drivers: Market news impacting Gold

Gold's recent price action reflects mixed market dynamics. A general shift towards risk assets has diminished the safe-haven demand for gold. However, declining US Treasury bond yields are near a one-month low, and expectations of further Federal Reserve rate cuts in 2025 have kept gold afloat. Additionally, weak economic data from the US, including a 2.2% drop in durable goods orders and a significant decline in consumer confidence in January, has further fueled uncertainty, benefiting gold as a hedge.

Concerns over President Donald Trump’s tariff plans on imported goods, including computer chips and metals, have added to the cautious market sentiment. The potential for global trade tensions to escalate could further enhance gold’s safe-haven appeal.

Technical analysis: Gold price targets $3,000

The daily chart for gold indicates strong bullish momentum following a price reversal from the key support level at $2,730. The formation of a double bottom at $2,720–$2,730 has strengthened this support zone, paving the way for a potential breakout above $2,790. The RSI is currently at 63, suggesting that upward momentum could continue. A successful breakout above $2,790 may trigger a rally toward the psychological $3,000 mark.

On the 4-hour chart, gold is trading within a bullish trend. Moreover, a correction from $2,785 reached the support level of $2,730, indicating that a rebound could sustain the upward trend. Consequently, this technical setup highlights the potential for higher prices as the market absorbs key macroeconomic developments.

The 15th January cycle low in Gold

Gold Predictors accurately identified January 15th, 2025, as a key cycle low, with a margin of error of 72 hours. Following this low, gold prices rebounded sharply, climbing toward multi-month highs. This short-term cycle aligns with broader historical patterns, emphasizing the role of cycles in influencing gold’s price trajectory.

The chart below highlights how the confirmed cycle low on January 13th was a launchpad for the recent rally. Cycles are critical in forecasting gold prices, providing traders and investors with insights into potential turning points. This recent example underscores how cyclical analysis complements technical and fundamental approaches, enabling more informed decision-making.

Conclusion

Gold prices remain resilient amid mixed market signals as traders eagerly anticipate the Federal Reserve’s policy decision. Additionally, weak US economic data and uncertainties surrounding President Trump’s tariff policies further support gold’s safe-haven appeal. Moreover, technical analysis suggests potential upside, with targets of $2,790 and $3,000.

Furthermore, identifying the January 15th cycle low by Gold Predictors underscores the importance of cyclical analysis in understanding gold’s price movements. As markets remain volatile, gold will likely remain a focal point for traders seeking stability amid ongoing economic uncertainty.

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