Gold Price Forecast: Can Fed Rate Cuts Push XAU/USD Beyond $3,689 This Week?
Quick overview
- Gold (XAU/USD) closed at $3,643, maintaining support above key moving averages and trendlines.
- The upcoming FOMC meeting is expected to influence gold prices, with a potential rate cut that could weaken the dollar.
- Technical indicators show indecision in the market, with resistance levels at $3,656 and support at $3,623.
- Traders should consider long positions above $3,641, while newcomers may see potential for a quick rise if resistance is broken.
Gold (XAU/USD) closed at $3,643 as we head into a big week of US economic data and the Fed meeting. After a few days of sideways action, gold is holding above the 50-period SMA at $3,641 and the rising trendline from early September, both of which have been good floors.
This alignment of moving averages and trendline support suggests buyers are defending the levels, keeping the gold structure intact.
Fed Meeting and Economic Data
Wednesday is the big day, with the FOMC meeting, where the Fed is expected to cut rates by 25 basis points, with a small chance of a 50-basis-point cut. This decision and updated economic projections will be the most significant drivers for gold this week.
Rate cuts weaken the dollar and boost non-yielding assets, such as gold, but this all depends on the Fed’s tone.
Other events this week:
- Empire State Manufacturing Index (Mon) – US business activity
- Retail Sales (Tue) – consumer spending trends
- Jobless Claims (Thu) – labor market
- Philly Fed Index (Thu) – regional manufacturing
Any slowdown in growth or softer labor data will reinforce gold as a safe-haven asset.
Technical Outlook for Gold
On the 2-hour chart, gold’s candles are showing indecision with small-bodied formations near the $3,656 resistance, resembling spinning tops.
This means buyers and sellers are balanced, but it doesn’t erase the bigger trend. The RSI is at 51, indicating a neutral but recovering position from earlier oversold levels, suggesting that momentum may be building.
- Resistance to watch: $3,656, $3,673, $3,689 – all highs from earlier in the month.
- Support at $3,623, $3,613, $3,599.
A close above $3,656 could confirm the breakout, especially if accompanied by long green candles resembling the “three white soldiers” pattern, which often indicates strong continuation.
For those who trade, look for long positions above $3,641 to $3,673 and $3,689, with stops under $3,623.
For newcomers, think of it as gold resting on a good floor, and if it breaks the current ceiling, it could rise quickly.
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