|

XAU/USD forecast: Gold holds firm above $4,000 as Fed cut priced in

  • Gold stabilizes near $4,080 with the 25bp Fed rate cut fully priced in (96.7%), leaving Powell’s tone as the key driver for the next move.
  • Central-bank demand and data delays from the US shutdown continue to anchor downside resilience.
  • Technical: Consolidation between $4,004–$4,161; a break above $4,161 reopens the path to $4,300, while a close below $3,944 invalidates the bullish case.

The rate cut is old news — Powell’s words are the catalyst

Gold is treading water around $4,080, trapped in a defined range between $4,004–$4,161, as traders prepare for the October 30 FOMC decision.

The market is no longer reacting to the rate cut itself — the CME FedWatch Tool shows a 96.7% probability that the Fed will cut rates by 25bps (4.25% → 4.00%), making the move fully priced in.

What’s not priced in, however, is the Fed’s tone during Powell’s press conference. If the Chair signals that more easing could follow — citing weaker growth or global risks — gold may find fresh fuel to break higher. But if Powell emphasizes caution or suggests a “cut and pause” approach, traders may see short-term profit-taking push prices back toward $4,000.

Adding to the complexity, US data remains disrupted by the government shutdown, with the Advance GDP report (forecast 3.0% vs 3.8% prior) expected hours after the FOMC. The combination of policy tone + GDP surprise could spark the next volatility burst in XAU/USD.

Fed rate decision impact on Gold

Fed Decision Timeline (UTC +8)

  • Oct 30, 2:00 AM – FOMC Rate Decision (4.25% – 4.00%).
  • Oct 30, 2:30 AM – Powell Press Conference.
  • Oct 30, 8:30 PM – US Advance GDP (QoQ forecast 3%).

With the cut already priced, gold’s reaction hinges on the tone, not the decision:

If Powell leans dovish

  • Mentions “further adjustments”, economic headwinds, or global weakness.
  • Yields fall, USD softens, and gold breaks above $4,161, targeting $4,200–$4,300.
  • Reinforces gold’s long-term uptrend backed by central-bank accumulation.

If Powell stays neutral or cautious

  • Notes data-dependence and inflation vigilance.
  • Market remains range-bound between $4,004–$4,161.
  • Traders wait for GDP results or further data clarity to confirm direction.

If Powell sounds hawkish

  • Suggests the Fed might pause easing or is “comfortable” with inflation levels.
  • Dollar rebounds, real yields tick higher, and gold dips below $4,004, testing $3,944–$3,900.

Technical outlook (four-hour structure)

Gold remains in a sideways correction, holding firm above the 0.618–0.705 retracement zone of the October rally — a typical region for accumulation before continuation.

Bullish scenario: Breakout above $4,161

  • Trigger: H4 close above $4,161.50, ideally backed by a dovish Powell or softer GDP data.
  • Narrative: Confirms bullish continuation from the October low; upside momentum resumes.
  • Targets:
    • $4,200 → $4,260 short-term.
    • $4,300 → $4,381 (ATH retest zone).
  • Invalidation: H4 close back below $4,004 negates bullish breakout.

Bearish scenario: Breakdown below $4,004

  • Trigger: Failed break above resistance followed by decisive close below $4,004.
  • Narrative: Confirms exhaustion of bullish demand amid hawkish tone or strong GDP.
  • Targets:
    • $3,944 → $3,900 (liquidity zone)
    • Possible extension to $3,860 (0.786 retracement support).
  • Invalidation: Recovery and close above $4,161 restore neutral-to-bullish bias.

Big picture: Calm before the Fed

Gold’s macro structure remains bullish, but short-term sentiment is in pause mode.

  • The rate cut is not the eventPowell’s guidance is.
  • Traders should monitor press conference tone, not just the decision headline.
  • A dovish lean or weaker GDP could quickly reignite momentum toward $4,300+.
  • Conversely, any hint of pause rhetoric could trigger a temporary correction before long-term buyers reemerge.

Final thoughts

The rate cut itself is no longer the story — the market has already moved past that. What truly matters now is how Powell frames this decision and whether he signals a broader easing cycle or a temporary adjustment.

Gold’s recent behavior tells the story of patience rather than panic: it’s holding ground above $4,000, respecting structure, and awaiting clarity. The consolidation between $4,004 and $4,161 isn’t weakness — it’s compression before expansion. Once direction is confirmed, the move could be sharp and decisive.

If Powell leans dovish, gold has every reason to resume its climb toward $4,300–$4,381, supported by central-bank accumulation, lower real yields, and safe-haven demand amid global uncertainty.

But if the Fed hints at a pause or slower easing path, a brief pullback below $4,000 would be natural — a reset, not a reversal.

For traders, this week is all about reaction, not prediction. Let the Fed’s tone set the tempo, and trade the breakout from structure, not inside the noise.

Gold’s trend remains constructively bullish, and the market seems to be simply waiting — not wondering — for its next cue.

In short: The Fed’s decision is priced in. Powell’s tone isn’t.
The next breakout in gold will tell us which narrative wins.

Author

Jasper Osita

Jasper Osita

ACY Securities

Jasper has been in the markets since 2019 trading currencies, indices and commodities like Gold. His approach in the market is heavily accompanied by technical analysis, trading Smart Money Concepts (SMC) with fundamentals in mind.

More from Jasper Osita
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD moves sideways below 1.1800 on Christmas Eve

EUR/USD struggles to find direction and trades in a narrow channel below 1.1800 after posting gains for two consecutive days. Bond and stock markets in the US will open at the usual time and close early on Christmas Eve, allowing the trading action to remain subdued. 

GBP/USD keeps range around 1.3500 amid quiet markets

GBP/USD keeps its range trade intact at around 1.3500 on Wednesday. The Pound Sterling holds the upper hand over the US Dollar amid pre-Christmas light trading as traders move to the sidelines heading into the holiday season. 

Gold retreats from record highs, trades below $4,500

Gold retreats after setting a new record-high above $4,520 earlier in the day and trades in a tight range below $4,500 as trading volumes thin out ahead of the Christmas break. The US Dollar selling bias remains unabated on the back of dovish Fed expectations, which continues to act as a tailwind for the bullion amid persistent geopolitical risks.

Bitcoin slips below $87,000 as ETF outflows intensify, whale participation declines

Bitcoin price continues to trade around $86,770 on Wednesday, after failing to break above the $90,000 resistance. US-listed spot ETFs record an outflow of $188.64 million on Tuesday, marking the fourth consecutive day of withdrawals.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Avalanche struggles near $12 as Grayscale files updated form for ETF

Avalanche trades close to $12 by press time on Wednesday, extending the nearly 2% drop from the previous day. Grayscale filed an updated form to convert its Avalanche-focused Trust into an ETF with the US Securities and Exchange Commission.