XAU/USD outlook: Gold cracks pivotal support in post-Fed trading but lacks strength

XAU/USD

Gold edged lower on Thursday following probe through pivotal supports at $3374/65 (Fibo 23.6% of $3120/$3452/trendline support/10DMA).

Near term sentiment weakened after Fed rate decision and comments from Chair Powell. Although Powell did not provide any new information regarding Fed’s policy outlook (Fed is likely to deliver two 0.25% rate cuts in 2025) but inflation outlook was upwardly revised, while predictions of economic growth were downgraded.

In addition, overheated geopolitical situation and continuous story about US tariffs, which also became key components, adds to uncertainty and hawkishly aligned overall message from Fed.

However, dips below pivotal supports were so far limited (contained by 20DMA at $3350) and struggling to verify break, keeping traders cautious and refraining from taking any stronger action.

Markets will look for today’s closing for fresh signals, although loss of $3374/65 zone might not be very harmful for larger bulls, as there is still plenty of space towards lower breakpoints at $3325/00 (Fibo 38.2% / psychological), where extended dips should find firm ground and still see pullback as a healthy correction.

High uncertainty over escalation of conflict in the Middle East is likely to continue to underpin the action and limit downside attempts, which would add to (still) preferred dip-buying scenario.

Technical picture on daily chart remains predominantly bullish as positive momentum is strong and MA’s are in almost full bullish configuration that contributes to scenario of healthy correction preceding fresh push higher.

Psychological $3400 level marks significant barrier, clear break of which to sideline downside risk and shift focus on target at $3452 (Jun 16 top) and key barrier at $3500 (new record high).

Res: 3388; 3400; 3437; 3452.
Sup: 3350; 3325; 3300; 3286. 

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