Gold's brief rally stalls after FOMC, outlook firms on patient Fed stance

Yesterday's brief gold rally, triggered by the Fed's neutral statement, stalled near a key resistance level. The reaction seemed counterintuitive, given Chair Warsh avoided any mention of a near-term rate hike and made no material policy signals.

Gold should find short-term support from gradually declining real yields, as inflation expectations rise while nominal yields stay stable. Elsewhere, US-Iran talks remain at an impasse. Vice President Vance reportedly sent a letter to Iran this week to restart negotiations.

The GPD, PCE, and Jobless Claims figures are due today. The data is not expected to shift the Fed's stance, having upgraded its growth assessment yesterday. The PCE can be reliably predicted from CPI and PPI data.

Jobless Claims are likely the key release, but a significant deterioration is probably required to move markets, as good figures are already priced in. Weak data could amplify growth fears and support gold on a dovish repricing further out the curve.

Gold Technical Analysis – Daily Timeframe

The daily chart shows gold near a downward trendline. Sellers are expected to defend this line, with a defined risk above it, targeting the 3,885 support zone. Buyers want a breakout higher to fuel a rally toward the 4,700 level.

Gold Technical Analysis – 4 Hour Timeframe

The price was rejected again at the 4,070 resistance zone on the 4-hour chart. A minor upward trendline now defines the recent pullback. Buyers are expected to support this trendline, with a defined risk below it, to push into new highs. Sellers want a break lower to build bearish positions targeting the 3,885 support level.

Gold Technical Analysis – 1 Hour Timeframe

A minor downward trendline on the 1-hour chart defines the current bearish momentum. Sellers are expected to trade against this trendline, with a defined risk above it, targeting new lows. Buyers seek a break higher to fuel a rally into new highs, with the major downward trendline as an initial target.

Upcoming Catalysts

US GPD, PCE, and Jobless Claims figures arrive today. The week concludes tomorrow with the Employment Cost Index.