Gold price outlook: What do markets expect from the Fed’s meeting?

Gold – price news, and analysis

• What Investors are watching in the US Federal Open Market Committee Meeting
• Key Technical Levels to Monitor on the gold daily price chart

Today, the US Federal Open Market Committee (FOMC) is set to announce its interest rate decision, with expectations that rates will remain unchanged at 4.5% following three rate cuts last year totalling 100 basis points.

Policymakers would consider the potential impact of former President Donald Trump’s upcoming economic policies, which are expected to push US inflation higher. These policies could include tax cuts, stricter immigration policies, and tariffs on imports. There is ongoing discussion about imposing a universal tariff of 2.5%, with plans for gradual increases, though a final decision on the rate has yet to be made.

Investors will closely follow Federal Reserve Chair Jerome Powell’s press conference for insights into Trump’s influence on the US monetary policy with the labour market showing resilience—bolstered by December’s robust jobs report—and inflation persisting above the Fed’s 2% target, policymakers are likely to maintain a cautious approach toward future interest rate reductions. Some officials suggest the neutral interest rate—the level that neither stimulates nor restrains the economy—could now hover near 4%, potentially leaving limited room for further reductions. Trump, however, disagrees with Fed members, advocating for more significant rate cuts to boost economic growth.

Gold Price Daily Chart

Chart Source: ADSS Platform

On January 24, gold prices reached a multi-week high of $2,785/oz before retreating as traders took profits. Currently, the precious metal is trading within a narrow range between 2,724 and 2,791 and may be approaching a test of its low end.

• Bearish Scenario: A daily close below the low end of the mentioned range would signal weakening bullish momentum, potentially leading to a decline toward $2,583. In this case, support levels at the 50-day simple moving average and the bullish trendline originating from the November 14 low should be closely monitored.
• Bullish Scenario: A daily close above the high end of the mentioned range highlights a strong upside momentum, possibly driving prices toward the $2,900 mark.