Insights 
VT 
Gold has cooled from record highs, down 0.7% to $3,665. Despite this decrease, it remains up roughly 0.6% for the week and more than 6% for the month, defying soft seasonal expectations. The dip follows a brief rise past the $3,700 mark during overnight trading, driven by profit-taking before the Federal Reserve’s decision.
Gold’s Bullish Outlook
Gold maintains a bullish outlook after recently surpassing $3,500. However, if the dollar strengthens post-Fed announcement, a modest pullback and shift in near-term momentum may occur. Key levels for gold’s moving averages are $3,658 and $3,636; breaking through these could lead to increased selling activity.
A temporary pullback in gold prices remains possible, but as long as US economic data weakens and the Fed continues its rate-cutting path, gold is expected to maintain its upward trajectory. Furthermore, gold’s persistent rally supports a strategy of buying on significant pullbacks or corrections in the wider market context.
With gold pulling back from its record high near $3,700, the immediate focus is on today’s Fed decision. The metal’s impressive 32% year-to-date rally in 2025 shows strong underlying demand. Traders should watch for any hawkish surprise that could strengthen the dollar and push gold down temporarily.
For the short term, this pullback offers an opportunity for hedging. We are watching the key moving averages at $3,658 and $3,636 as a line in the sand. A break below these levels could signal a deeper, but likely brief, correction, making short-dated puts a reasonable strategy to protect gains.
Long-Term Bullish View
The bigger picture remains bullish, so any significant dip should be seen as a buying opportunity. The recent August 2025 jobs report showed payrolls grew by only 140,000, and core inflation has cooled to 2.4%, giving the Fed ample reason to continue its easing cycle. This fundamental backdrop supports higher gold prices into the end of the year.
We saw a similar setup back in 2019, when the Fed pivoted to cutting rates and gold began a sustained multi-month rally. History suggests that once a rate-cutting cycle is confirmed, gold’s path of least resistance is upward. The current environment, coupled with ongoing geopolitical instability, reinforces this long-term bullish view.
In the coming weeks, derivative traders might consider selling cash-secured puts at lower strike prices, such as $3,600 or even $3,550, to collect premium while waiting for a pullback. For those with a longer view, buying call options dated for early 2026 allows for participation in the expected rally while defining risk. This positions for the trend of softer economic data and further central bank easing.
