Gold slipped sharply from record highs after the Fed’s latest rate cut, as Powell’s cautious tone triggered profit-taking, though safe-haven demand remains strong.
gold
Gold Price Forecast: Profit-Taking on FED Hawkish Interest Rates Cut – Buy Dip Now or Later?
Gold slipped sharply from record highs after the Fed’s latest rate cut, as Powell’s cautious tone triggered profit-taking, though safe-haven
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Last updated: Wednesday, September 17, 2025
Quick overview
- Gold prices fell sharply from record highs after the Federal Reserve's recent rate cut, dropping $60 from $3,707 to $3,646.
- Fed Chair Jerome Powell's cautious tone regarding future rate cuts disappointed markets, leading to a stronger U.S. dollar and weaker gold prices.
- Despite the decline, safe-haven demand for gold remains strong, supported by global uncertainty and central bank interest, particularly from China.
- Traders are monitoring key support levels around $3,650, with a potential upward target of $4,000 if momentum resumes.
Live GOLD Chart
GOLD
MARKETS TREND
Record Highs, Then Sharp Reversal
Gold surged above $3,700 earlier this week, climbing as high as $3,707.42 after the Federal Reserve announced a 25-basis-point rate cut to 4.25%. However, momentum quickly faded, with prices reversing to $3,646—a $60 drop from the fresh all-time high. The sharp correction came as traders locked in profits following the rally fueled by dovish expectations.
Golf Chart H4 – Will the 20 SMA Hold?
Powell’s “Risk Management” Cut
Fed Chair Jerome Powell described the move as a “risk management cut,” emphasizing concerns over potential job market risks rather than signaling an aggressive easing cycle. This messaging disappointed markets, which had been pricing in up to 150 basis points of further cuts this year and next.
Powell also noted stronger-than-expected consumer demand, further dampening expectations for additional near-term easing. If upcoming employment data proves resilient, it could reduce the odds of another rate cut in December.
Market Reaction: USD Strength, Gold Weakness
Initially, the FOMC decision sparked selling in the U.S. dollar and buying in gold. But once Powell’s cautious stance became clear, sentiment flipped. The USD strengthened while gold retreated, highlighting how quickly traders adjusted to the Fed’s less-dovish tone.
Despite the decline, safe-haven flows remain evident. Global uncertainty and renewed central bank interest in bullion—particularly from China—continue to lend underlying support.
Buyers Step In, Support at 20-SMA
Following the $60 drop, buyers stepped back into the market, lifting gold $15 higher to around $3,660. Technical indicators show the 20-day SMA (gray) holding as an important support level. As long as this level remains intact, the broader uptrend remains valid.
While today’s Fed rhetoric may trigger further near-term volatility, gold’s long-term trajectory still points higher. Many traders now view $4,000 as the next major resistance zone once momentum resumes.
Outlook: Volatility with an Upward Bias
In the short term, gold may see more profit-taking as markets digest Powell’s comments and upcoming employment reports. However, the metal’s safe-haven appeal, central bank buying, and persistent macro risks suggest buyers will continue to defend key support levels.
For now, traders are closely watching whether gold can consolidate above $3,650 and resume its upward march toward the symbolic $4,000 mark.
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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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