Article by: ETO Markets
Gold prices are under pressure as markets brace for the Federal Reserve's upcoming policy decision, with expectations of rate cuts largely priced in, potentially capping further upside. Bearish macro factors include a strengthening US dollar, bolstered by robust economic data such as higher-than-expected retail sales and a strong Services PMI, which diminish gold's appeal as an inflation hedge. Additionally, any hawkish signals from the Fed suggesting a slower rate-cut trajectory could further weigh on prices. However, persistent geopolitical tensions, including the ongoing Israel-Gaza conflict and trade policy uncertainties under the Trump administration, continue to provide underlying support for gold’s safe-haven demand. Market sentiment remains cautious, with investors closely monitoring the Fed’s economic projections and Chair Powell’s commentary for insights into future monetary policy.
From a technical perspective, XAUUSD is consolidating near $… after retreating from its recent peak of $… on March 20, 2025. The price action shows a formation of lower highs on the daily timeframe, suggesting weakening bullish momentum. The 14-day average true range (ATR) stands at $34.68, providing a baseline for typical price movement. However, the past few days have shown heightened fluctuations, with a daily range of $29.25 on March 19 and a more pronounced $38.85 on March 18. Turning to moving averages, the 55-day Simple Moving Average (SMA) at $… is currently well below the trading range, reinforcing the broader uptrend’s intact status. Should the price decline significantly, this level could transition into a robust support zone. Similarly, the 100-day SMA at $… holds even greater significance as a long-term trend indicator. The short-term support base just above $… remains a pivotal level to watch. However, if this support gives way, it could catalyze a deeper correction. Potential downside targets in such a scenario include the psychologically significant $… level, which has historical resonance as a round-number support, or the 20-day SMA at $…, which could serve as an intermediate cushion. Conversely, a breakout above the recent high of $… would signal renewed bullish strength, potentially targeting $… or higher, depending on momentum and volume confirmation.
