Gold prices continued to fluctuate ahead of the Federal Reserve's interest rate decision.
2026-04-29 09:04:55
On Wednesday morning in Asia, international gold prices (XAU/USD) remained range-bound around $4,600 , with overall market trading cautious. This was primarily due to investors awaiting the Federal Reserve's latest interest rate decision and subsequent policy press conference. Current market expectations suggest the Fed is highly likely to keep its benchmark interest rate unchanged at 3.50%-3.75% , marking the third consecutive meeting without a rate cut, indicating a continued cautious approach from policymakers regarding the balance between inflation and economic growth.
Meanwhile, the market is paying close attention to any forward-looking signals that this meeting may release. With current Chairman Powell's term nearing its end and his successor Warsh drawing closer to confirmation, uncertainty surrounding policy continuity and the future path of interest rates has increased. Against this backdrop, investors are more inclined to interpret the Fed's overall assessment of inflation, employment, and rising energy prices through the meeting statement and press conference.
From a macroeconomic perspective, the uncertainty surrounding the situation in the Middle East continues to escalate, particularly the disruption of shipping through the Strait of Hormuz, which has exacerbated concerns about global energy supply. It's important to note that the Strait of Hormuz handles approximately 20% of global seaborne crude oil transport ; continued supply chain constraints will further drive up energy prices and spill over into the global economy through imported inflation. Against this backdrop, market expectations for a resurgence of inflation have strengthened, which to some extent reduces the Federal Reserve's room for interest rate cuts in the short term.
Gold, as a typical safe-haven asset, often receives capital inflows during periods of heightened geopolitical risk. However, gold itself does not offer interest income, and its attractiveness is somewhat diminished when interest rates remain high or even face expectations of further tightening. Therefore, the current gold market is actually in a state of balancing between "support from safe-haven demand" and "suppression from high interest rates." If the Federal Reserve releases hawkish signals and the dollar index strengthens, gold may face short-term downward pressure; conversely, if policy rhetoric is cautious or hints at future easing, it is expected to drive gold prices further upward.
From a market sentiment perspective, investors are currently leaning towards a wait-and-see approach, with capital flows becoming more conservative. Some institutions are inclined to reduce their positions before policy clarification to mitigate event risks, while short-term traders are relying more on technical charts for range trading. Meanwhile, inflation expectations and geopolitical risks remain key supporting factors for medium-term gold allocation.
From a technical perspective, gold maintains a high-level upward trend on the daily chart, with prices trading above major moving averages, indicating a continued bullish bias. The $4550 level forms a key support zone, while $4650 is a significant short-term resistance level. A decisive break above this level could open up further upside potential. Momentum indicators show that while bullish momentum remains dominant, it has shown signs of slowing, suggesting a decline in the willingness to chase higher prices. On the 4-hour chart, prices are in a consolidation range with narrowing short-term volatility. The RSI indicator is near neutral, indicating the market is awaiting new drivers for direction. A break above $4620 could test the upper resistance level in the short term; otherwise, a pullback to the $4550 support level is possible.
Editor's Summary : Overall, the gold market is currently at a critical juncture, supported by geopolitical risks and inflation expectations on one hand, and suppressed by the high-interest-rate environment on the other. In the short term, the Federal Reserve's policy signals will be the core variable determining the direction of gold prices, and the market may maintain a volatile pattern while awaiting clear guidance. If the subsequent policy stance leans towards easing, gold is expected to continue its upward trend; conversely, if hawkish signals strengthen, the risk of a phased price correction should be noted. In the medium to long term, global economic uncertainty and changes in the inflation structure will continue to provide potential support for gold.
Meanwhile, the market is paying close attention to any forward-looking signals that this meeting may release. With current Chairman Powell's term nearing its end and his successor Warsh drawing closer to confirmation, uncertainty surrounding policy continuity and the future path of interest rates has increased. Against this backdrop, investors are more inclined to interpret the Fed's overall assessment of inflation, employment, and rising energy prices through the meeting statement and press conference.
From a macroeconomic perspective, the uncertainty surrounding the situation in the Middle East continues to escalate, particularly the disruption of shipping through the Strait of Hormuz, which has exacerbated concerns about global energy supply. It's important to note that the Strait of Hormuz handles approximately 20% of global seaborne crude oil transport ; continued supply chain constraints will further drive up energy prices and spill over into the global economy through imported inflation. Against this backdrop, market expectations for a resurgence of inflation have strengthened, which to some extent reduces the Federal Reserve's room for interest rate cuts in the short term.
Gold, as a typical safe-haven asset, often receives capital inflows during periods of heightened geopolitical risk. However, gold itself does not offer interest income, and its attractiveness is somewhat diminished when interest rates remain high or even face expectations of further tightening. Therefore, the current gold market is actually in a state of balancing between "support from safe-haven demand" and "suppression from high interest rates." If the Federal Reserve releases hawkish signals and the dollar index strengthens, gold may face short-term downward pressure; conversely, if policy rhetoric is cautious or hints at future easing, it is expected to drive gold prices further upward.
From a market sentiment perspective, investors are currently leaning towards a wait-and-see approach, with capital flows becoming more conservative. Some institutions are inclined to reduce their positions before policy clarification to mitigate event risks, while short-term traders are relying more on technical charts for range trading. Meanwhile, inflation expectations and geopolitical risks remain key supporting factors for medium-term gold allocation.
From a technical perspective, gold maintains a high-level upward trend on the daily chart, with prices trading above major moving averages, indicating a continued bullish bias. The $4550 level forms a key support zone, while $4650 is a significant short-term resistance level. A decisive break above this level could open up further upside potential. Momentum indicators show that while bullish momentum remains dominant, it has shown signs of slowing, suggesting a decline in the willingness to chase higher prices. On the 4-hour chart, prices are in a consolidation range with narrowing short-term volatility. The RSI indicator is near neutral, indicating the market is awaiting new drivers for direction. A break above $4620 could test the upper resistance level in the short term; otherwise, a pullback to the $4550 support level is possible.
Editor's Summary : Overall, the gold market is currently at a critical juncture, supported by geopolitical risks and inflation expectations on one hand, and suppressed by the high-interest-rate environment on the other. In the short term, the Federal Reserve's policy signals will be the core variable determining the direction of gold prices, and the market may maintain a volatile pattern while awaiting clear guidance. If the subsequent policy stance leans towards easing, gold is expected to continue its upward trend; conversely, if hawkish signals strengthen, the risk of a phased price correction should be noted. In the medium to long term, global economic uncertainty and changes in the inflation structure will continue to provide potential support for gold.
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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.
