Gold is supported by the Fed's interest rate cut expectations and geopolitical risks, maintaining high volatility
2025-09-15 13:39:11
Gold rebounded slightly in Asian trading to around $3,640, and is currently hovering at the top of its one-week range. Investors are staying on the sidelines ahead of key central bank meetings this week, awaiting clarity on the next price direction.
The market focus is on the Federal Reserve's interest rate decision to be announced on Wednesday, which will directly affect the US dollar and provide a driving factor for gold prices.
Expectations of a Fed rate cut have increased recently, with the market betting on three rate cuts this year, including at meetings in September, October, and December. This has kept U.S. Treasury yields low and the dollar close to its lowest level since July 24, providing support for non-yielding gold.
According to market research, traders used the CME FedWatch tool to calculate that the probability of the Federal Reserve cutting interest rates by 25 basis points at its September meeting has reached 100%, and further rate cuts are expected in the next two meetings, thus supporting a short-term rebound in gold prices.
Geopolitical risks also support gold's safe-haven appeal: Ukraine launched a major attack on Russian energy facilities on Sunday, prompting the US to push for tighter energy sanctions; and Iranian lawmakers called on Qatar to expel US troops and deploy hypersonic missiles to counter Israeli threats. These factors are maintaining risk aversion in the market ahead of the Arab-Islamic summit.
Investors remain cautious about gold in the short term, preferring to await interest rate decisions from the FOMC, Bank of Commerce, Bank of Economy, and Bank of Japan. They will also monitor Fed Chairman Powell's press conference and updated economic forecasts (including the dot plot) to gauge dollar demand and the direction of gold prices.
From a technical perspective, the daily RSI remains in overbought territory, indicating limited short-term upward momentum and the possibility of continued range-bound consolidation. A break above the $3,658 resistance level could push the price back towards the all-time high of $3,675 and further challenge the psychological barrier of $3,700.
The support level below is $3,627, the low of the Asian session, and $3,600. If it breaks below $3,580, it may extend the pullback to $3,560 and further test the psychological support of $3,500.
Editor's Note: Gold is supported in the short term by expectations of a Fed rate cut and geopolitical risks, but technical indicators suggest overbought conditions, suggesting a period of consolidation. Market participants should remain cautious and wait-and-see ahead of key central bank meetings this week.
If the price successfully breaks through the resistance of $3,658, gold is expected to challenge the historical high of $3,675 or even the psychological level of $3,700; on the contrary, if it breaks below the support of $3,627, we need to be wary of the risk of a pullback.
The market focus is on the Federal Reserve's interest rate decision to be announced on Wednesday, which will directly affect the US dollar and provide a driving factor for gold prices.
Expectations of a Fed rate cut have increased recently, with the market betting on three rate cuts this year, including at meetings in September, October, and December. This has kept U.S. Treasury yields low and the dollar close to its lowest level since July 24, providing support for non-yielding gold.
According to market research, traders used the CME FedWatch tool to calculate that the probability of the Federal Reserve cutting interest rates by 25 basis points at its September meeting has reached 100%, and further rate cuts are expected in the next two meetings, thus supporting a short-term rebound in gold prices.
Geopolitical risks also support gold's safe-haven appeal: Ukraine launched a major attack on Russian energy facilities on Sunday, prompting the US to push for tighter energy sanctions; and Iranian lawmakers called on Qatar to expel US troops and deploy hypersonic missiles to counter Israeli threats. These factors are maintaining risk aversion in the market ahead of the Arab-Islamic summit.
Investors remain cautious about gold in the short term, preferring to await interest rate decisions from the FOMC, Bank of Commerce, Bank of Economy, and Bank of Japan. They will also monitor Fed Chairman Powell's press conference and updated economic forecasts (including the dot plot) to gauge dollar demand and the direction of gold prices.
From a technical perspective, the daily RSI remains in overbought territory, indicating limited short-term upward momentum and the possibility of continued range-bound consolidation. A break above the $3,658 resistance level could push the price back towards the all-time high of $3,675 and further challenge the psychological barrier of $3,700.
The support level below is $3,627, the low of the Asian session, and $3,600. If it breaks below $3,580, it may extend the pullback to $3,560 and further test the psychological support of $3,500.
Editor's Note: Gold is supported in the short term by expectations of a Fed rate cut and geopolitical risks, but technical indicators suggest overbought conditions, suggesting a period of consolidation. Market participants should remain cautious and wait-and-see ahead of key central bank meetings this week.
If the price successfully breaks through the resistance of $3,658, gold is expected to challenge the historical high of $3,675 or even the psychological level of $3,700; on the contrary, if it breaks below the support of $3,627, we need to be wary of the risk of a pullback.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
