Article by: ETO Markets
Gold prices (XAU/USD) remain subdued near a one-week low amid expectations of a less dovish Federal Reserve, with investors anticipating a cautious stance on rate cuts next year due to stalled progress in reducing inflation to the 2% target. This has kept US Treasury yields elevated, pressuring the non-yielding metal. While geopolitical tensions, including escalating violence in Gaza, Israeli airstrikes in Syria, and NATO warnings about Russian ambitions in Europe, provide some support to gold as a safe-haven asset, traders are awaiting Wednesday's crucial FOMC decision for further direction. The CME Group’s FedWatch Tool indicates a 93% likelihood of a 25-basis-point rate cut, but recent inflation data has tempered expectations of aggressive monetary easing. Monday’s release of global flash PMIs may offer near-term trading opportunities while broader focus remains on the Fed's policy outlook.
From a technical perspective, gold prices are navigating a key support-resistance range. The price around $… aligns with a congestion zone, and sustained selling pressure could push prices toward $…, with further downside potential targeting the monthly low of $… and the pivotal $… support zone. A decisive break below $… would signal fresh bearish momentum. Conversely, resistance lies at $… supported by 55-days Simple Moving Average. A break above these levels could pave the way for a climb toward the $… mark and possibly the monthly swing high of $…, clearing which would signal a stronger near-term bullish trend.
