Insights 
VT 
Gold prices face renewed selling pressure, trading just below $3,350. The US Federal Reserve’s hawkish stance supports the US Dollar, impacting demand for gold.
European equity markets’ positive tone also weighs on gold prices. However, geopolitical tensions in the Middle East and trade uncertainties could limit losses for the XAU/USD pair, which is on course for weekly declines.
Fed Interest Rate Projections
The Fed held interest rates steady amid concerns over tariffs’ impact on consumer prices. Projections include two rate cuts by 2025 and one cut each in 2026 and 2027, with inflation risks persisting.
The risk sentiment remains fragile due to geopolitical tensions and trade uncertainties. Tariffs on the pharma sector could influence markets and potentially support gold as a safe-haven asset.
Geopolitical concerns include tensions between Iran and Israel, raising regional conflict risks. The US Dollar’s retreat from a recent high may support gold, suggesting potential for dip-buying.
From a technical viewpoint, gold prices are influenced by moving averages and key support levels, with potential for further decline. Resistance levels around $3,374-3,375 and $3,400 may challenge any recovery.
We’ve seen a fresh wave of downward momentum in gold, now sitting just under $3,350 per ounce. The main weight on the metal has come from the Federal Reserve’s stronger tone, which has steadied the US Dollar. When the Dollar gains traction, especially against a backdrop of firm monetary policy, gold typically dips—as the cost of holding non-yielding assets increases.
European Market Sentiment
European share markets, meanwhile, are in a more upbeat mood. Risk-on sentiment tends to draw capital away from safe havens, and this week’s equity movement reinforced that picture. While that may sound like a clear negative for gold, there’s more under the surface that warrants closer monitoring.
The geopolitical backdrop has hardly calmed. Tensions in the Middle East remain elevated, particularly involving Iran and Israel. Escalation risk continues to simmer, and while markets haven’t entirely priced that in, any further incidents could quickly flip sentiment. On top of that, trade questions—particularly around tariffs on the pharmaceutical industry—add a layer of unpredictability. These aren’t idle headline risks; they directly affect forward-looking inflation expectations and may influence hedging behaviour.
Chair Powell’s team chose to leave policy unchanged, but the outyears of the Summary of Economic Projections revealed just enough to keep forward markets guessing. We noted guidance for a couple of cuts by 2025, spaced further by one apiece into 2026 and 2027. Importantly, inflation remains a concern, even as growth slows. That carries implications not just for gold, but for the entire curve of rate-sensitive assets.
An important point: the Dollar, after touching recent highs, has started to drift off a bit. For those watching correlations, this matters. A softening Greenback tends to lighten the pressure on metals, and we’ve often seen dip buyers reappear in exactly these circumstances. But they tend to be selective, often stepping in near well-defined technical zones.
On the charts, gold continues to trade below its 50-day average. That’s a mark we often use to gauge medium-term trend direction. Further weakness holds unless there’s a push through resistance near $3,374, and then again up at $3,400. We’re currently sitting in a range that seems to invite either profit-taking from shorts or incremental buying from traders with a longer-term inflation hedge in mind.
We’re also tracking support around $3,325. If that level cracks, it opens the door to sharper pullbacks. But without fresh drivers, downside may prove sluggish. Watch closely for sudden spikes in geopolitical headlines; these often trigger algorithmic buying in gold, especially when paired with Dollar softness.
For those positioning in derivatives tied to this market, the short-term setup favours tactical trading within ranges, rather than trend chasing. Timing matters more than usual here, given the fine balance between policy expectations and real-world risk events.
