Quick overview

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Gold  rose slightly during the London trade session, hitting a new weekly high on Wednesday. Despite a hawkish US dollar recovering from its lowest level since late October, it has not been able to capitalize on this momentum.

There is a growing consensus that the US Federal Reserve (Fed) will cut borrowing costs after a two-day policy meeting concludes today. Bullish traders are benefiting from an overnight bounce from the trading range support area and the subsequent upward movement.

However, it would be prudent to wait for sustained strength above the $4,245–$4,250 barrier before seeking additional gains, as the daily chart shows neutral oscillators.

 

If momentum continues, the price of gold could rise toward the intermediate resistance at $4,277-$4,278 on its way to $4,300. Conversely, if the price falls below the $4,200 mark, it may attract some buyers near the trading range support of $4,170–$4,165. A significant break below this level could test the $4,115 support, which coincides with the 200-period Exponential Moving Average (EMA) on the 4-hour chart and an ascending trend line in place since late October.

 

Bearish traders may view further selling as a significant catalyst. The non-yielding yellow metal is likely to find some support due to this critical factor. As we approach this key central bank event, market participants remain cautious. The safe-haven appeal of gold is bolstered by geopolitical uncertainties stemming from the ongoing conflict between Russia and Ukraine.

However, bulls in the XAU/USD market seem hesitant to make new investments until they receive more information regarding the Fed’s rate-cut strategy. Consequently, comments from Fed Chair Jerome Powell during the press conference following the meeting and updated economic forecasts will be central topics of discussion.