Gold slows ahead of Fed decision

RoboForex Analysis Department RoboForex

Gold held above 4,050 USD an ounce on Wednesday after rising over the previous two sessions. Investors are awaiting the Federal Reserve's rate decision while assessing the results of the Israeli elections for their potential consequences on the Middle East conflict.

The Fed is expected to keep rates unchanged, but the focus will be on signals of a possible increase in December. Any signs of the regulator maintaining a hawkish stance could put renewed pressure on gold.

Meanwhile, the Reserve Bank of New Zealand unexpectedly kept rates unchanged, despite widespread expectations of another increase. The decision underscored the regulator's more cautious approach to further monetary tightening.

The geopolitical backdrop remains an important factor for the market. Oil prices are holding highly volatile after tense elections in Israel, the outcome of which could affect the further development of the conflict. At the same time, throughout the year, gold has come under pressure precisely because regional tensions have expanded inflationary risks and expectations of higher interest rates, reducing the appeal of the metal, which offers no coupon income.

Technical analysis

On the four-hour H4 XAU/USD chart, gold maintains a downward trend. The market completed corrective growth to the 4,064 USD level and formed another decline wave to 4,034 USD. In the short term, a recovery in quotes towards resistance at 4,082 USD, with a subsequent retest of the broken level from below, is not ruled out. After the correction is completed, the decline is expected to resume towards 3,975 USD. A breakdown of this support would open potential for movement towards the main target of 3,931 USD, with the prospect of reaching 3,913 USD. The MACD indicator confirms the prevailing downward trend: the signal line is below zero but beginning to turn upwards, indicating an easing of selling pressure and allowing for a short-term correction before the main move continues.

On the H1 hourly XAU/USD chart, gold completed an upward correction in the 4,064 USD area and formed a new downward momentum. The price is fixed below resistance, preserving the likelihood of further decline. The immediate target is 4,029 USD. A breakdown of this level would create conditions for movement towards support at 4,000 USD, then 3,975 USD and 3,931 USD. The Stochastic oscillator is in the oversold zone below the 20 level, confirming current market weakness but at the same time increasing the likelihood of a local corrective recovery.

The main scenario for today remains a decline in gold following a possible test of the 4,064–4,082 USD zone from below. A close above 4,082 USD would ease the bearish scenario and set the stage for a deeper correction towards 4,145 USD. Until such a signal appears, the priority remains on selling into local upward market movements.

Conclusion

Gold is pausing ahead of the Fed's rate decision, with markets focused on any signals regarding a potential December hike. While the Fed is expected to hold steady, a hawkish tone could renew pressure on the metal. The Reserve Bank of New Zealand's unexpected rate hold has reinforced the theme of cautious central bank behaviour, while geopolitical uncertainty following Israel's elections keeps oil prices volatile. Gold remains caught between safe-haven demand and the headwinds of elevated inflation and rate expectations. Technically, the downward trend persists, with resistance at 4,082 USD and targets at 4,029, 4,000 USD, and 3,931 USD. A short-term corrective bounce is possible given oversold conditions, but the broader outlook remains bearish unless the price closes decisively above 4,082 USD.

Author

RoboForex Analysis Department

RoboForex

RoboForex Analysis Department provides timely market insights, expert technical analysis, and actionable forecasts across forex, commodities, indices, and equities.

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