Gold News: Will Powell’s Rate Outlook Be the Catalyst for Gold’s Next Big Move?

Gold Prices Steady as Traders Await Fed Decision and Trump’s Economic Moves

Gold prices are slightly lower on Wednesday, consolidating near last week’s high of $2,786.06 and the all-time high of $2,790.17. A breakout above this level would signal a continuation of the uptrend, while a decline below $2,730.56 could shift momentum downward. Traders are awaiting a clear catalyst, with the Federal Reserve’s interest rate decision set to provide potential direction.

At 10:44 GMT, XAU/USD is trading $2758.77, down $4.650 or -0.17%.

Gold Range-Bound as Fed Policy and Trump’s Trade Plans Weigh on Sentiment

Gold remains in a tight trading range as markets digest the impact of Federal Reserve policy expectations and renewed trade concerns linked to President Donald Trump’s economic agenda. Traders saw a short-covering rally last week following initial tariff threats, driving gold 2.6% higher, near its record peak. However, profit-taking at these levels has kept prices in check.

Monday’s sell-off in technology stocks, triggered by concerns over Chinese AI model DeepSeek, prompted some investors to liquidate gold holdings to cover losses. This added further short-term volatility to the metal’s price action. Now, gold is awaiting clarity from the Fed meeting, with investors also considering the possibility of future rate cuts and a potential correction in equity markets.

Fed Expected to Hold Rates Steady, Powell’s Comments in Focus

The Federal Reserve is widely expected to keep rates unchanged at 4.25%-4.50%, following 100 basis points of easing last year. While the market has priced in little chance of an immediate rate cut, Fed Chair Jerome Powell’s post-meeting remarks will be critical in shaping expectations for future policy moves.

Treasury yields edged lower on Wednesday as investors positioned ahead of the decision, set for release at 19:00 GMT. Powell’s press conference at 19:30 GMT will be closely monitored for any hints on inflation, economic growth, and potential rate adjustments later in the year. Traders will be particularly sensitive to any indications of a shift in the Fed’s stance, as dovish signals could provide tailwinds for gold.

Trump’s Tariff Threats and Political Pressure Add to Market Uncertainty

Adding another layer of uncertainty, Trump has reiterated plans to impose tariffs on Canada and Mexico, a move that could fuel inflation and complicate the Fed’s monetary policy decisions. His repeated calls for lower interest rates put further pressure on the central bank, despite its mandate to act independently.

Former Kansas City Fed President Esther George emphasized that the Fed must focus on price stability rather than political demands. However, with Trump’s influence growing, markets are on alert for potential disruptions that could drive safe-haven demand for gold.

Gold Prices Forecast: Awaiting a Breakout or Deeper Pullback

Gold remains in a consolidation phase, with traders looking for a decisive move post-Fed. A breakout above $2,790.17 could trigger a renewed rally, while failure to hold $2,730.56 may open the door for a decline toward key support at $2,693.04-$2,663.50. The 50-day moving average at $2,666.55 is a crucial level to watch.

Near-term direction hinges on Powell’s remarks and any unexpected shifts in Fed policy. A cautious stance from the Fed could keep gold supported, while a more hawkish tone may pressure prices lower. Traders should remain vigilant, as volatility is likely to increase following the Fed’s decision.

More Information in our Economic Calendar.