Gold Price Forecast: FOMC Holds Fed Rate at 3.50%-3.75%, XAU/USD Climbs Towards $4,100

XAU/USD gained ground on Thursday, as the Federal Reserve kept interest rates steady, with markets pleased at the lack of an immediate rate hike and reassessing the Fed’s forward guidance. Gold was propelled higher by the news and neared $4,100 per ounce, though the Fed’s stance continued to curb bullish expectations.

On Wednesday afternoon, the FOMC voted 9-3 to leave rates at 3.50%-3.75%. This was the fifth straight meeting where the US central bank did not change policy, as it continued assessing the impact of its previous hikes. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan all voted against the rate hold in favor of a 25-basis point increase, signaling that the fight against inflation continues.

“The economy is expanding at a solid pace,” the Fed said in its statement. “Capital spending has been strong, and business investment has supported growth in productivity.” It further added that inflation remains elevated, reflecting higher energy costs and supply chain pressures resulting from geopolitical tensions in the Middle East.

While the Fed left rates unchanged, Warsh’s hawkish remarks suggest that additional increases may be necessary if inflation does not show signs of slowing down.

During his press conference, Warsh reiterated that there is no implicit inflation target above 2% and that the Fed “will not waver” in its commitment to restore price stability. While the Fed’s decision to hold rates at its current level reduced immediate pressure on markets, he made clear that the central bank will tighten policy further if needed. However, Fed guidance prompted investors to scale back, but not rule out, expectations of another rate hike later this year.

Central banks continue to buy gold

Investment demand for gold has suffered in recent years due to higher rates. However, central banks have provided steady demand for the metal in recent years.

In the first quarter of 2026, central banks bought a net total of 244 tonnes of gold. China has continued to purchase gold through June, while other buyers have included Poland, Kazakhstan, and Uzbekistan.

A survey by the World Gold Council last week found that 89% of central bank reserve managers believe global official gold holdings will increase over the next 12 months. Central banks have traditionally purchased the metal for reserve diversification, rather than taking advantage of short-term opportunities. The metal serves as a hedge against currency depreciation and geopolitical risk.

Mine supply continues to remain stable, though high prices continue to reduce jewelry demand in major markets like India and China.

Gold Technical Analysis: Triangle Resistance Is Key

Gold has recovered off support around $4,021. Recent bullish candlesticks suggest buyers are re-entering the market after several sessions of consolidation.

However, the move encountered resistance near the 50-period EMA at $4,056. This indicates that sellers remain active on bounces, as bulls seek to find a new equilibrium after the recent selloff.The symmetrical triangle continues to dominate the price action, as both the uptrend and downtrend lines converge toward a breakout.

The upper edge of the triangle sits close to the 200-period EMA at $4,132. Together, they establish a major resistance area between $4,132 and $4,173. A breakout and daily close above this zone would signal bullish sentiment and open the door to $4,220.

Momentum appears balanced. The RSI has bounced off oversold conditions and now rests near 50, indicating neutral conditions. While bearish momentum has faded, buyers will need a breakout to signal the resumption of bullish pressure.

Resistance is expected at $4,080, followed by $4,132, $4,173, and $4,220. Support is seen at $4,021. If the bottom of the triangle breaks, further support will be located at $3,963 and $3,914.

Resistance: $4,080, $4,132, $4,173 and $4,220

Support: $4,021 $3,963 and $3,914

Gold Outlook

Gold has gained support in the short term following the Fed’s decision to hold rates. However, Warsh’s comments indicate that more tightening is possible.

Markets will look to the upcoming US PCE inflation report and labor market data for signals on whether another rate hike could occur as soon as September.

In the technical picture, XAU/USD shows a slight bullish bias. The pair remains above $4,021 but will require a decisive break above $4,132 for a more significant move higher. This level represents a convergence between the symmetrical triangle and the 200-period EMA. Until then, gold is likely to remain in a consolidation pattern as markets reassess the outlook for US monetary policy.

ABOUT THE AUTHOR See More

Arslan Ali Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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