Gold price gains about 2.5% after Fed hike and lower Treasury yields boost safe-haven appeal

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Gold surges 2.53% today to $4371.78

Highlights

Gold rebounded initially after the Federal Reserve delivered its first rate hike since July 2023, then fell on hawkish guidance and potential for further increases.
Persistent inflation, U.S. dollar strength, and government debt concerns continue to impact gold demand as a safe haven asset.
Gold trades below key moving averages with negative momentum and is expected to move between $4,289 and $4,453, with greater than 80% probability of a downward move.

Fed signals drive sentiment shift as demand faces macro headwinds

Gold moved sharply as the U.S. Federal Reserve delivered its first rate hike since July 2023, with investors closely watching forward guidance from Chair Kevin Warsh. Gold prices initially rebounded as Treasury yields and oil prices softened ahead of the Fed announcement. However, a hawkish Fed outlook with signals of further increases pressured Gold afterward, with macro factors such as persistent inflation, U.S. dollar strength, government debt concerns, and central bank actions impacting its demand as a safe haven.

Anton Kharitonov, expert at Traders Union, sees the recent rally in Gold as fragile. He points to persistent selling pressure, with prices below key moving averages and negative momentum signals. Kharitonov remains skeptical about any sustained upside due to a hawkish Fed stance, elevated volatility, and weak macro sentiment. Risk factors like dollar strength and government debt add further weight to his cautious view. "Gold's rebound is likely to fade fast, and traders should remain defensive until technicals turn," he warns.

Viktoras Karapetjanc, expert at Traders Union, stays constructive as Gold shows resilience despite the hawkish Fed. He emphasizes that macro drivers such as persistent inflation and safe-haven demand can fuel further growth. Karapetjanc notes that the market offers multiple setups with volatility presenting tactical opportunities. He believes that breaking above $4,402 could signal new upside momentum. "The bullish structure remains intact, and I expect buyers to reemerge strongly on dips," he asserts.

Jainam Mehta, market strategist, sees Gold trading rangebound as technicals and macro factors offset each other. He highlights a potential contrarian setup if oversold momentum persists despite bearish signals. Mehta points out that tactical trades may arise from intraday volatility and sentiment divergence around $4,332. "A quick reversal could develop if support holds and sentiment shifts, so nimble traders should watch these levels closely," he says.

Bearish bias dominates as key moving averages and momentum diverge

XAU/USD is currently below its 20-day moving average at $4,413 and its 200-day moving average at $4,545, but it remains just above the 50-day moving average at $4,326. This indicates sustained selling pressure in both short- and long-term timeframes, while medium-term technicals are offering limited support. The nearest resistance is observed at $4,402, with support seen at $4,332. Momentum indicators, including the MACD and ADX, continue to signal a bearish bias. The RSI stands at a weak 40.51, suggesting a sell, while both the Stochastic RSI and CCI highlight oversold conditions. Bull/Bear Power points to some intraday buying attempts, but the overbought reading warns that this may not last. The Awesome Oscillator further confirms the prevailing negative trend. Although the session opened flat and rallied sharply to $4,371, volatility is elevated with a 1.79% intraday move. The upward move contrasts with generally bearish momentum signals.

Earlier, analysts noted that gold was exhibiting short-term resilience amid Fed-related volatility, but flagged risks of pullbacks due to overbought signals. The current setup marks a shift as downside momentum intensifies, making a move below $4,332 a key risk to monitor 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

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