Gold prices edged up in early Tuesday trading and are currently holding above the $4,200 level. The precious metal has been rangebound over the past week, as gold bulls continue to wait for the conclusion of tomorrow’s FOMC meeting and rate decision before placing fresh trades. A 25bp cut is seen as almost certain and is already priced in by financial markets. But the real focus for traders will be the policy statement and the post-meeting remarks by the Chairman of the Federal Reserve, which may offer clues about the future path of the central bank’s monetary policy. A dovish scenario — in which Powell effectively confirms further rate cuts in 2026 — would likely weaken the US dollar and support gold prices due to the inverted price correlation between the two assets, with the $4,300 level emerging as a potential short-term target. However, and this is precisely why traders have been waiting patiently for this meeting, a hawkish stance would be more surprising and could therefore have a stronger market impact. In such a scenario, US dollar gains could be sizeable, and the price of the precious metal could fall and test the $4,100 support level.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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