Gold (XAU/USD) gains some positive traction during the Asian session on Wednesday and recovers a part of the previous day’s heavy losses more than 2%, to the $4,843-4,842 region or a nearly two-week low. The intraday move higher could be attributed to repositioning trade ahead of the release of the FOMC Minutes. Investors will look for more cues about the US Federal Reserve’s (Fed) rate-cut path, which will play a key role in influencing the near-term US Dollar (USD) price dynamics and providing a fresh directional impetus to the non-yielding yellow metal.
In the meantime, Chicago Fed Austan Goolsbee said on Tuesday that there are potentially several more interest rate cuts this year if inflation resumes a decline to the 2% target. This comes on top of softer US consumer inflation figures released last Friday and reaffirmed bets that the US central bank will lower borrowing costs in June and deliver two more rate cuts in 2026. This, in turn, helps revive demand for the Gold. Despite the dovish outlook, the USD sticks to a mild positive bias, which, along with easing geopolitical tensions, could cap the safe-haven commodity.
Discussions between the US and Iran kicked off, and both sides reached an understanding on the main “guiding principles” during the second round of nuclear talks in Geneva, easing concerns about a military confrontation. Meanwhile, the tri-lateral meeting between the US, Russia, and Ukraine, peace talks were moved to Wednesday. Nevertheless, the optimism remains supportive of a generally positive tone around the equity markets and makes it prudent to wait for strong follow-through buying before positioning for any further appreciating move for the XAU/USD pair.
Looking ahead, US markets will focus on housing data, remarks from Fed officials, GDP figures for Q4 2025, and the release of the Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) Price Index.
XAU/USD 4-hour chart
Gold bounces off 200-period SMA on H4; not out of the woods yet
The commodity finds decent support and rebounds from the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the Gold holds above the steadily rising SMA, maintaining a broader upside bias. The average provides dynamic support at $4,833.48. Despite the supportive long-term slope, momentum needs confirmation before a sustained rebound takes shape.
The Moving Average Convergence Divergence (MACD) line remains below the Signal line and under the zero mark, while the negative histogram has begun to contract, hinting at easing bearish momentum. The Relative Strength Index stands at 43.46, below the 50 midline and pointing to restrained buying pressure.
A rebound from the rising SMA would keep the trend profile intact, whereas a close below that gauge would expose further downside. Additional narrowing of the MACD histogram and a bullish crossover above the Signal line would strengthen recovery prospects. A push in the RSI through 50 would improve the near-term tone and could allow buyers to re-engage.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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