Gold surged and then fell, beware of short-term adjustments
2025-09-18 13:34:30
Gold (XAU/USD) consolidated in Asian trading on Thursday, holding above $3,650, having hit an all-time high on Wednesday. The Federal Reserve's dovish stance on rate cuts provided support for non-yielding gold, but the dollar's recovery from multi-year lows limited further gains.
The Federal Reserve cut its key interest rate by 25 basis points to a range of 4.00% to 4.25% on Wednesday and hinted that two more rate cuts may be made this year to address the weak labor market.
Federal Reserve Chairman Jerome Powell stated that the current rate cut was a risk management measure and there was no need to rush. The Fed will also adopt a meeting-by-meeting approach to monitor the interest rate path. The dollar and U.S. Treasury yields rebounded quickly after an initial decline, partially offsetting gold's gains.
Gold was also supported by geopolitical risks, including the escalating conflict between Russia and Ukraine, tensions in the Middle East, and Europe's response to energy dependence and war situations.
German Chancellor Merz warned Russia against repeatedly testing the limits of EU airspace, while European Commission President von der Leyen called for an accelerated halt to Russian gas and oil imports. Israel's escalating military action in Gaza has also drawn international attention.
On the economic front, the Federal Reserve released its latest economic forecast: the US economic growth rate is expected to be 1.6% in 2025, 1.8% in 2026 and 1.9% in 2027; core PCE inflation is expected to be 3.1% in 2025, 2.6% in 2026 and 2.1% in 2027, and the long-term target will remain at 2%.
The market will then focus on economic data such as the number of initial jobless claims in the United States and the Philadelphia Fed manufacturing index on Thursday, as well as policy moves by the Bank of England and the Bank of Japan, which may bring short-term fluctuations to gold prices.
The XAU/USD pair is showing a clear bullish trend on the daily chart, having hit an all-time high of $3,707 on Wednesday before beginning a correction. Support is found near $3,645, previously a resistance level that has now become key support, limiting any short-term downside.
The daily candlestick chart shows a series of bullish breakouts and subsequent small pullbacks, forming a typical bullish flag consolidation structure. The daily RSI is in the overbought zone, indicating short-term profit-taking pressure, but the overall trend remains bullish.
Short-term resistance is concentrated at $3,680 and the historical high of $3,700-3,707. Once gold breaks through this range, it may continue its recent upward momentum. If it falls below the support of $3,645, the short-term target may fall to the $3,610-3,600 area.
Editor's opinion:
Gold is currently trading sideways near $3,650, with fundamentals slightly favoring it. If the US dollar falls further or geopolitical risks escalate, the XAU/USD pair is expected to hit new highs again.
The Federal Reserve cut its key interest rate by 25 basis points to a range of 4.00% to 4.25% on Wednesday and hinted that two more rate cuts may be made this year to address the weak labor market.
Federal Reserve Chairman Jerome Powell stated that the current rate cut was a risk management measure and there was no need to rush. The Fed will also adopt a meeting-by-meeting approach to monitor the interest rate path. The dollar and U.S. Treasury yields rebounded quickly after an initial decline, partially offsetting gold's gains.
Gold was also supported by geopolitical risks, including the escalating conflict between Russia and Ukraine, tensions in the Middle East, and Europe's response to energy dependence and war situations.
German Chancellor Merz warned Russia against repeatedly testing the limits of EU airspace, while European Commission President von der Leyen called for an accelerated halt to Russian gas and oil imports. Israel's escalating military action in Gaza has also drawn international attention.
On the economic front, the Federal Reserve released its latest economic forecast: the US economic growth rate is expected to be 1.6% in 2025, 1.8% in 2026 and 1.9% in 2027; core PCE inflation is expected to be 3.1% in 2025, 2.6% in 2026 and 2.1% in 2027, and the long-term target will remain at 2%.
The market will then focus on economic data such as the number of initial jobless claims in the United States and the Philadelphia Fed manufacturing index on Thursday, as well as policy moves by the Bank of England and the Bank of Japan, which may bring short-term fluctuations to gold prices.
The XAU/USD pair is showing a clear bullish trend on the daily chart, having hit an all-time high of $3,707 on Wednesday before beginning a correction. Support is found near $3,645, previously a resistance level that has now become key support, limiting any short-term downside.
The daily candlestick chart shows a series of bullish breakouts and subsequent small pullbacks, forming a typical bullish flag consolidation structure. The daily RSI is in the overbought zone, indicating short-term profit-taking pressure, but the overall trend remains bullish.
Short-term resistance is concentrated at $3,680 and the historical high of $3,700-3,707. Once gold breaks through this range, it may continue its recent upward momentum. If it falls below the support of $3,645, the short-term target may fall to the $3,610-3,600 area.
Editor's opinion:
Gold is currently trading sideways near $3,650, with fundamentals slightly favoring it. If the US dollar falls further or geopolitical risks escalate, the XAU/USD pair is expected to hit new highs again.
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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.
