Gold (XAU/USD) eased 0.21% on Wednesday to $4,039 after comments from Federal Reserve Chair Kevin Warsh, who said he could not describe financial conditions as tight even as credit conditions have tightened. Warsh said policy restraint is showing signs of traction while inflation remains elevated, and reiterated a 2% price-stability target measured by PCE. The Fed held rates at 3.75%–4% with two dissenters, Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack, who backed a 25 basis point rise. The statement described economic activity as expanding, with resilient domestic spending, strong productivity growth and robust capital investment, while job gains have kept pace with the workforce and the unemployment rate has changed little.
Federal Reserve Policy and Inflation Outlook
The central bank said inflation remains elevated but paused to gather further evidence on the appropriate stance, with Thursday’s Core PCE Price Index and GDP data in focus. The swaps market priced 21 basis points of tightening, implying an 85% chance of a December hike, according to Prime Terminal, while Reuters reported analysts trimmed gold forecasts towards end-2026.
Geopolitical and Technical Factors
Geopolitical risk also stayed in view after a Houthi attack on a Saudi refinery lifted energy prices on supply concerns. Technically, RSI turned bearish as resistance sits near $4,100, then $4,200, with the 100-day SMA at $4,218 and the 50-day SMA at $4,278; support is seen at $4,000, then $3,975, $3,959 and $3,941.
