Gold Price Eyes $3,383 Recovery Amid Fed Inflation Warnings
Gold (XAU/USD) is trading at $3,371 after the Fed’s latest interest rate decision. The Fed’s cautious tone on inflation...
Quick overview
- Gold (XAU/USD) is currently trading at $3,371 following the Fed's decision to hold interest rates steady, which has increased market volatility.
- The Fed's cautious stance on inflation and labor market risks, along with ongoing US-China trade tensions, has heightened gold's appeal as a safe-haven asset.
- Key technical levels to watch include support at $3,327 and resistance at $3,383, with potential for a deeper correction if prices fall below $3,303.
- Traders are advised to consider entering long positions around $3,327 while implementing stop-loss orders to manage risk.
Gold (XAU/USD) is trading at $3,371 after the Fed’s latest interest rate decision. The Fed’s cautious tone on inflation and labor market risks has added volatility to the metal, which is often used as a hedge against economic instability. Here’s a closer look at the current technical setup and what to watch for in the coming days.
Fed Caution and Trade Tensions Boost Gold Demand
Gold rose on Thursday as the Fed held interest rates steady and warned of rising inflation and labor market risks. The dovish tone, combined with geopolitical risks, has made gold more attractive as a safe-haven.
Meanwhile, US-China trade tensions remain a key driver, with President Donald Trump saying he’s taking a hardline approach ahead of the talks. Trump’s recent comments suggested China is initiating the trade talks, which could lead to a wild market reaction. This uncertainty has historically supported gold prices as investors seek to protect their wealth during economic turmoil.
Key Levels to Watch
Gold is trading near its 50-hour EMA at $3,372, a short-term support level. Key Fibonacci levels are:
38.2% Level ($3,352) – Initial support, a bounce zone if selling continues.
50% Level ($3,327) – Psychological support where buyers may step in.
61.8% Level ($3,303) – Deeper retracement, where strong buying may emerge if reached.
A break above the 23.6% level at $3,383 could clear the way for a retest of the recent high at $3,432, a resistance zone for bulls. But a move below $3,303 would signal a trend reversal and open up for a deeper correction.
Trade Setup and Risk Management
For those looking to trade this setup, a long position could be entered around $3,327, targeting $3,383 and possibly $3,432. Use a stop-loss below $3,303 to limit your risk.
Confirm the bounce with volume and momentum indicators, like the MACD or RSI.
Use tight stops to limit losses, especially in volatile markets.
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