Gold (XAU) Price Forecast: Powell’s Comments Key as Traders Await Fed Signals

Gold Prices Hold Record Highs as Fed Decision Looms

Gold prices remain near all-time highs, extending a seven-day rally with no clear resistance levels in sight. While targets such as $3,100 and $3,200 are being floated, the absence of immediate selling pressure suggests strong underlying demand. However, the metal is trading well above its 50-day moving average at $2,853.27, raising the risk of a short-term pullback.

At 11:33 GMT, XAU/USD is trading $3039.42, up $5.305 or +0.17%.

Profit-Taking and Geopolitical Concerns Keep Gold Elevated

Some profit-taking has emerged following gold’s record-breaking surge, but analysts suggest that further upside is possible. ANZ commodity strategist Soni Kumari noted that fears tied to geopolitical instability could push prices beyond $3,050. So far this year, gold has reached 15 record highs, underscoring the strong demand for safe-haven assets.

Concerns over a potential U.S. economic slowdown and heightened recession risks continue to drive investors toward gold. The resumption of conflict in the Middle East, particularly renewed attacks in Gaza, has added another layer of uncertainty. Meanwhile, former President Donald Trump’s proposed reciprocal and sectoral tariffs—set to take effect on April 2—have increased inflationary concerns, further bolstering gold’s appeal.

Federal Reserve Policy in Focus

Market participants are closely watching the Federal Reserve’s interest rate decision and Fed Chair Jerome Powell’s press conference later today. The central bank is widely expected to keep rates steady at 4.25%-4.50%, maintaining its cautious approach in the face of economic uncertainty. However, traders will scrutinize the Fed’s economic projections for any signs of a shift in policy expectations.

The CME FedWatch Tool indicates a 98% probability of a rate cut in June. Still, some analysts caution that if inflation remains stubbornly high—especially due to trade-related price pressures—the Fed may delay or reduce the number of cuts expected this year. Powell’s remarks will be crucial in shaping market sentiment, with a more hawkish tone potentially disrupting gold’s rally.

Market Forecast: Gold’s Uptrend Faces Fed Test

Gold remains well-supported by safe-haven demand, geopolitical tensions, and recession concerns. Any price dips are likely to attract strong buying interest, given the prevailing uncertainty. However, a hawkish Fed stance or stronger U.S. dollar could create near-term headwinds for gold.

If Powell signals a prolonged period of higher rates, bond yields may rise, putting downward pressure on gold. Conversely, any dovish signals reinforcing rate-cut expectations would likely fuel further gains. Traders should brace for volatility as the Fed’s policy outlook unfolds.

More Information in our Economic Calendar.