Gold retains bullish bias as Fed rate cut bets counter USD uptick ahead of FOMC Minutes

Gold (XAU/USD) sticks to modest intraday gains through the early European session on Wednesday, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's (Fed) rate-cut path. The outlook, in turn, will play a key role in influencing the near-term US Dollar (USD) price dynamics and providing a fresh directional impetus to the non-yielding yellow metal.

In the meantime, Chicago Fed Austan Goolsbee said on Tuesday that there are potentially several more interest rate cuts this year if inflation resumes a decline to the 2% target. This comes on top of softer US consumer inflation figures released last Friday and reaffirmed bets that the US central bank will lower borrowing costs in June and deliver two more rate cuts in 2026. This, in turn, helps revive demand for the Gold. Despite the dovish outlook, the USD sticks to a mild positive bias, which, along with easing geopolitical tensions, could cap the safe-haven commodity.

Discussions between the US and Iran kicked off, and both sides reached an understanding on the main “guiding principles” during the second round of nuclear talks in Geneva, easing concerns about a military confrontation. Meanwhile, the tri-lateral meeting between the US, Russia, and Ukraine, peace talks were moved to Wednesday. Nevertheless, the optimism remains supportive of a generally positive tone around the equity markets and makes it prudent to wait for strong follow-through buying before positioning for any further appreciating move for the XAU/USD pair.

Looking ahead, US markets will focus on housing data, remarks from Fed officials, GDP figures for Q4 2025, and the release of the Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) Price Index.

XAU/USD 4-hour chart

Gold defends 200-period SMA on H4 support

The commodity finds decent support and rebounds from the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the Gold holds above the steadily rising SMA, maintaining a broader upside bias. The average provides dynamic support at $4,833.48. Despite the supportive long-term slope, momentum needs confirmation before a sustained rebound takes shape.

The Moving Average Convergence Divergence (MACD) line remains below the Signal line and under the zero mark, while the negative histogram has begun to contract, hinting at easing bearish momentum. The Relative Strength Index stands at 43.46, below the 50 midline and pointing to restrained buying pressure.

A rebound from the rising SMA would keep the trend profile intact, whereas a close below that gauge would expose further downside. Additional narrowing of the MACD histogram and a bullish crossover above the Signal line would strengthen recovery prospects. A push in the RSI through 50 would improve the near-term tone and could allow buyers to re-engage.

(The technical analysis of this story was written with the help of an AI tool.)