... Trade Reviews Gold nears record high after Fed rate cut

Gold nears record high after Fed rate cut

Gold prices have regained bullish momentum following the Federal Reserve’s monetary policy decision, wherein the central bank reduced its benchmark interest rate and signalled the possibility of further cuts in the coming year.

The Federal Reserve decided to lower its interest rate by 25 basis points, leaving open the possibility of implementing one or two additional cuts in 2026.
The US central bank will adopt a "meeting-by-meeting" approach, prioritising updated economic data as the primary determinant for future decisions.
The gold futures contract appreciated by 2.14% amidst the lower interest rate environment in the United States.

Gold prices rise following Fed decision and prospect of future cuts

The gold futures contract (GCG26) rose by approximately 2.14% to trade at $4,310 per ounce. Demand for the precious metal surged after the Federal Reserve decided to cut its benchmark interest rate by 25 basis points to 3.75%. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold.

Although the US central bank anticipates implementing one or two rate cuts next year, the future trajectory of Federal Reserve policy remains uncertain due to the prevailing economic ambiguity. Domestic policy pressures or further deterioration in US economic indicators could alter monetary policy forecasts. Consequently, market participants are basing decisions primarily on immediate data releases.

Gold prices are strengthening their long-term bullish momentum, trading in close proximity to the record high of $4,359. Sustained demand from funds, central banks, investors, and hedgers continues to support the precious metal's ascent amidst a global context defined by persisting uncertainty in the economy, trade, and geopolitics.

Technical analysis of gold

From a technical perspective, the gold futures contract remains within its long-term bullish trend. Key observations include:

Trend context. In the long term, the gold futures contract maintains a market structure characterised by higher highs and higher lows, and continues to respect its long-term moving averages (50, 100, and 200 periods). The price is currently trading near its historical high.
Resistance levels. Should the resistance at $4,359 (historical high) be breached to the upside, the next significant ceiling corresponds to $4,500 (a relevant psychological level). A decisive break above these levels would suggest the potential for an extension into higher price zones.
Support levels. If the support at $3,900 (short-term support) is broken to the downside, the next relevant floor is $3,600 (proximate to the 200-day moving average). A loss of the $3,600 zone would increase the probability of a deeper correction.
Momentum indicators. The MACD is exhibiting a recovery in its composition, lending support to the bullish momentum. Meanwhile, the RSI is approaching the overbought zone but maintains an upward trend (higher highs and higher lows).