Gold holds steady after Federal Reserve rate hike expectations weigh on sentiment

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Gold up 0.46% trades at $4,044

Highlights

Gold fell below $4,000 per ounce for the first time since November 2025 as U.S. economic strength erodes safe haven demand.
Continued central bank buying has been offset by ETF outflows and reduced consumer demand in China and India, creating a mixed fundamental backdrop.
Despite near-term momentum and overbought signals, Gold faces key resistance at $4,101, with a projected 2–3 day range of $3,987 to $4,101.

Mixed investor flows as Fed rate expectations and central bank buying diverge

According to Fxstreet, Gold traded below $4,000 per ounce for the first time since November 2025, marking a notable shift in market psychology that may drive greater trading activity. Businessinsider reports that robust U.S. economic data and persistent inflation have fueled expectations for further Federal Reserve rate hikes, reducing investor appetite for Gold given the higher opportunity cost of holding the metal. While central banks continue to buy Gold, ongoing outflows from ETFs and softer consumer demand in China and India have weighed on the market. These combined developments provide a mixed backdrop for current price action.

Uptrend momentum fades as overbought signals warn of pullback

On the hourly chart, XAU sits above the moving averages at $4,026 (MA-20) and $4,010 (MA-50), but remains well below the MA-200 at $4,643 on the daily timeframe. The Ichimoku Kijun level at $4,013 provides immediate support. The Relative Strength Index (RSI) is at 59.16, reflecting mild buying pressure, while the Moving Average Convergence Divergence (MACD) shows a Buy signal and the Average Directional Index (ADX) is Neutral, denoting the absence of a strong directional trend. The Commodity Channel Index (CCI), Stochastic RSI, and Bull/Bear Power all register as Overbought, indicating stretched intraday momentum. The Awesome Oscillator also signals a Buy, though persistent overbought oscillator readings alongside steady momentum raise the risk of a near-term pullback.

Bullish bias prevails if price breaches short-term resistance

In the short term, XAU is likely to trade within the $3,987 to $4,101 volatility band seen over the past few sessions. The probability of an upward move is 57%, favoring a bullish outcome if the price breaks above $4,101. Conversely, if support at $3,987 fails, a downside scenario becomes more probable. Range-bound behavior is expected if price consolidates within the defined corridor over the next two to three trading days.

Viktoras Karapetjanc, Traders Union expert, sees Gold holding above critical moving averages as a positive sign, despite recent price dips below $4,000. He notes that underlying central bank demand continues to support the market, while persistent U.S. macro strength puts pressure on inflows from other segments. With most technicals signaling stretched momentum, Karapetjanc believes that renewed institutional interest could tilt the balance in Gold’s favor if global risk appetite stabilizes. 'If Gold maintains support near $3,987, I expect buyers to focus on a move above $4,101 in the short term,' he says.

Earlier, analysts noted that gold's long-term outlook remained constructive due to persistent central bank demand and supportive macroeconomic factors. However, the current mixed signals from technical indicators and shifting investor sentiment highlight the importance of monitoring the $4,101 resistance level as a potential trigger for renewed bullish momentum in the near term.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.