- The gold fluctuates around 3,035 $ –3,3,050, winning after the Fed decision to keep the fees and slow down the reduction of its balance.
- Jerome Powell cites the growing economic uncertainty and tariff inflation; The Fed anticipates two feature cuts in 2024.
- Geopolitical tensions increase as high -fire conversations between Russia and Ukraine are stagnant and Israel intensifies bombings, increasing the demand for safe refuge.
Gold prices fired and reached a new historical maximum of $ 3,052 on Wednesday, while the president of the Federal Reserve (Fed), Jerome Powell, spoke after the Fed decision of maintaining the rates unchanged. At the time of writing, the Xau/USD is volatile in the range of 3,035 $ -3,050 $, rising more than 0.20%.
The Fed decided to keep the rates without changes in the range of 4.25% -4.50% and adjusted its balance, which is expected to be reduced in April. The Fed acknowledged that labor market conditions remain solid, but noted that inflation remains “somewhat” high, reaffirming its commitment to monitor risks on both sides of its dual mandate.
The economic projections of the Fed suggested that officials expect two rate cuts this year. It is forecast that the federal fund rate is maintained at 3.9%, without changes with respect to December projections. Other projections, such as inflation and unemployment rate, were reviewed upwards.
On the other hand, it is expected that the US economy will slow down the 2%threshold, indicating that it has become slightly fragile amid the commercial policies of US President Donald Trump.
After the decision of the US Central Bank, Jerome Powell took the floor. He said that “uncertainty about the (economic) perspectives has increased”, adding that part of tariff inflation has moved to consumers. Powell commented: “Our current policy position is well positioned to face the risks and uncertainties we face.”
As for geopolitics, hostilities between Russia and Ukraine continued despite the conversations to achieve a high 30 -day fire in the attacks on energy facilities. Meanwhile, the conflict in the Middle East intensified, with Israeli bombings that killed 400 people on Tuesday, according to Reuters.
What moves the market today: the price of gold ready to extend its recovery as real yields fall
- The 10 -year bonus of US bonus falls three basic points (PB) to 4,254%. At the same time, the American dollar index (DXY), which tracks the performance of the dollar against a basket of six currencies, rises 0.27% to 103.54.
- The real US yields, measured by the performance of US Treasury Treasury values protected at 10 years (Tips), which correlates inversely with gold prices, five and a half points fell to 1,935% according to Reuters.
- The Summary of Economic Projections (SEP) of the Federal Reserve includes forecasts on interest rates, growth, labor market and inflation.
- The federal fund rate is expected to remain at 3.9%, without changes in 2025, at 3.4% in 2026 and 3.1% by 2027. It is projected that the US economy grows 1.7% in 2025, below 2.1%. By 2026 and 2027 it is projected to remain at 1.8%.
- The unemployment rate is expected to remain close to the range of 4.3% -4.4% from 2025 to 2027, while PCE inflation would end 2025 by 2.7%, in 2.2% in 2026 and 2% in 2027.
- Finally, the underlying PCE is expected to end 2.8% this year, above 2.5%. It will fall towards the objective of 2% of the Fed until 2027.
- The monetary market has incorporated 65.5 basic relaxation points of the Fed in 2025, which has led to the yields of the US Treasury bonds. Caigan together with the US currency.
Technical perspective of the Xau/USD: The price of gold conquers the $ 3,000 and is ready to close above that level
The golden trend remains intact, and is ready to extend its gain and challenge the figure of $ 3,100. The precious metal has already printed a historical maximum of $ 3,052, exceeding the 3,050 $ psychological brand, but has lacked force to significantly point towards a new milestone.
The Relative Force Index (RSI) became overnspted, but due to the force of the upward trend, it remains shy to reach level 80.
On the contrary, if the Xau/USD falls below $ 3,000, the first support would be the daily maximum of February 20 in 2,954 $, followed by the mark of $ 2,900.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
