XAU/USD record-setting rally extends ahead of Fed decision
Gold sits at fresh record highs above $5,200 as Trump’s Fed Chair pick could coincide policy announcements.
The US Dollar sees a short-covering rally after plunging to four-year lows and ahead of key Fed event risks.
Gold braces for intense volatility while trending within the heavily overbought region on the daily chart.
Gold is continuing its record-printing spree early Wednesday, testing offers above the $5,200 level for the first time. Buyers refuse to pause heading into the US Federal Reserve policy announcements, due later in the day.
Amid US President Donald Trump’s erratic international trade policies and jawboning the US Dollar , Gold’s record-setting rally remains unabated. The bright metal is up already 20% this month, while posting over 5% gains so far this week.
The next big directional impetus in Gold could depend on the Fed’s policy verdict, with a no interest-rate-change decision widely anticipated. However, Fed Chair Jerome Powell’s assessment of the labor market conditions and hints at rate outlook will likely significantly impact the USD’s performance and hence, that of the non-yielding assets such as Gold.
However, markets will also remain attentive to Trump’s announcement of the next Fed Chair pick, which analysts predict could coincide with the Fed policy decision, overshadowing the latter and exacerbating concerns over the Fed’s independence. This could play out in favor of Gold buyers as the Greenback could be pushed back under the bus.
The USD plunged to four-year lows against its major currency rivals late Tuesday after Trump said the value of the Dollar was “great”, when asked whether he thought it had declined too much.
The US currency also faced headwinds from a weak US Conference Board Consumer Confidence data released on Tuesday. US consumer confidence slumped to the lowest level in more than 11-1/2 years in January, to 84.5 in January.
Daily technical analysis
In the daily chart, XAU/USD trades at $5,230.25. The 21-day SMA rises above the 50- and 100-day ones, with all SMAs trending higher and aligned bullishly. Price holds well above these references, reinforcing buyers’ control. The 21-day SMA at $4,664.50 offers nearby dynamic support. The RSI stands at 87 (overbought) and could precede a pause.
Shorter-term SMAs maintain bullish alignment over the longer gauges, sustaining a supportive trend structure. RSI’s extreme reading could curb immediate upside and prompt consolidation. On dips, the 50-day SMA at $4,430.18 offers initial support, while the 100-day SMA at $4,192.84 and the 200-day SMA at $3,772.42 would underpin the broader advance.
XAU/USD record-setting rally extends ahead of Fed decision
Gold is continuing its record-printing spree early Wednesday, testing offers above the $5,200 level for the first time. Buyers refuse to pause heading into the US Federal Reserve policy announcements, due later in the day.
Amid US President Donald Trump’s erratic international trade policies and jawboning the US Dollar , Gold’s record-setting rally remains unabated. The bright metal is up already 20% this month, while posting over 5% gains so far this week.
The next big directional impetus in Gold could depend on the Fed’s policy verdict, with a no interest-rate-change decision widely anticipated. However, Fed Chair Jerome Powell’s assessment of the labor market conditions and hints at rate outlook will likely significantly impact the USD’s performance and hence, that of the non-yielding assets such as Gold.
However, markets will also remain attentive to Trump’s announcement of the next Fed Chair pick, which analysts predict could coincide with the Fed policy decision, overshadowing the latter and exacerbating concerns over the Fed’s independence. This could play out in favor of Gold buyers as the Greenback could be pushed back under the bus.
The USD plunged to four-year lows against its major currency rivals late Tuesday after Trump said the value of the Dollar was “great”, when asked whether he thought it had declined too much.
The US currency also faced headwinds from a weak US Conference Board Consumer Confidence data released on Tuesday. US consumer confidence slumped to the lowest level in more than 11-1/2 years in January, to 84.5 in January.
Daily technical analysis
In the daily chart, XAU/USD trades at $5,230.25. The 21-day SMA rises above the 50- and 100-day ones, with all SMAs trending higher and aligned bullishly. Price holds well above these references, reinforcing buyers’ control. The 21-day SMA at $4,664.50 offers nearby dynamic support. The RSI stands at 87 (overbought) and could precede a pause.
Shorter-term SMAs maintain bullish alignment over the longer gauges, sustaining a supportive trend structure. RSI’s extreme reading could curb immediate upside and prompt consolidation. On dips, the 50-day SMA at $4,430.18 offers initial support, while the 100-day SMA at $4,192.84 and the 200-day SMA at $3,772.42 would underpin the broader advance.
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