Gold holds steady as investors await Federal Reserve’s rate decision
|Gold prices are hovering around 2,650 USD per troy ounce as investors remain cautious, conserving their energy for a potential move depending on the US Federal Reserve’s rate decision later tonight. The predominant market expectation is a 25-basis-point cut in interest rates, but there's significant uncertainty about the Fed’s monetary policy trajectory for 2025, which will be a key focus in today’s announcements.
Recent robust Retail Sales data from November, showing a 0.7% increase, have stirred discussions among investors that the Fed might decelerate its pace of rate cuts. This surge in retail sales is seen as a pro-inflationary factor, potentially influencing the Fed’s approach towards monetary easing.
A slowdown in rate reductions would likely be unfavourable for Gold, as lower interest rates generally decrease the opportunity cost of holding non-yielding assets like Gold, making it more attractive. Nonetheless, investors should wait for the Federal Reserve’s statement, which could diverge from current market speculations.
Since the start of the year, Gold has appreciated over 28%, potentially ending 2024 with the highest annual gain since 2010.
Technical analysis of XAU/USD
H4 Chart: Gold has established a consolidation range around the 2,675.55 level on the H4 chart. A growth structure has been formed up to 2726.27, and a corrective movement towards 2,635.00 is unfolding. Looking forward, a continuation of the growth wave towards 2743.85 is anticipated. The MACD indicator supports the bullish outlook, with its signal line below zero but pointed sharply upwards.
H1 Chart: On the H1 chart, Gold has completed a correction to 2,633.00 and is now expected to rise towards 2,680.00. After this increase, a potential decline to 2,658.00 may occur. Once this level is reached, a new growth phase towards 2705.70 will likely extend to 2,743.85. This scenario is corroborated by the Stochastic oscillator, whose signal line is currently above 50 and aiming towards 80, indicating upward momentum.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.