Gold Price Consolidates Above $2,150 As We Approach the FOMC

XAU has been finding solid demand in recent months, with the Gold price racing $2,19550 two weeks ago. But, it retreated lower last week, while this week XAU/USD has been consolidating in a $15 range above $2,150 as Gold traders stay on the sidelines ahead of the FED March meeting where they are expected to announce or give some strong hints regarding the start of rate cuts, with the majority expecting the first cut to be in June.

Gold Chart H4 – MAs Have Turned Into Resistance

We’re seeing a jump right after the statement has been released and despite facing strong pressure near the crucial resistance level of $2,165, the price of gold remains above $2,150. The precious metal is currently trading within Tuesday’s trading range. Market participants anticipate a breakout from this consolidation trend following the conclusion of the Fed’s policy meeting. On the downside, notable support levels include the December 4 high near $2,145 and the December 28 high at $2,088.

The majority of analysts now expect that the FED will commence rate decreases in June, altering the previous forecasts due to sticky inflation in recent months. They now anticipate 2-3 rate cuts this year, a reduction from the previous forecast of 3-4 cuts, attributed to a somewhat stronger inflation trajectory. However, analysts also foresee the rate-cutting cycle to persist through 2025 and 2026, with a terminal rate projection ranging between 3.25% and 3.5%.

Investors will closely monitor the Fed’s dot plot and economic forecasts, which will provide insight into interest rate projections and the outlook for US economic performance. However, particular emphasis will be placed on Fed Chair Jerome Powell’s news conference this time, as market participants seek clues regarding the timing of rate cuts.

Gold Live Chart

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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