Gold Trades Steady as Markets Await Fed Direction

Gold began the week with heightened volatility after closing around US$4,349 per troy ounce on Friday. The precious metal remains under pressure from expectations surrounding the Federal Reserve’s monetary policy after August US CPI data strengthened speculation of a potential rate hike. Markets are currently pricing in an 86–87% probability of a 25-basis-point rate hike at this week’s FOMC meeting.

From a fundamental perspective, the renewed rise in oil prices above US$100 per barrel presents a challenge for Gold. Higher energy prices increase the risk that inflation could remain elevated, potentially making the Federal Reserve more cautious about easing monetary policy. This could keep pressure on Gold through higher Treasury yields and a stronger US Dollar. On the other hand, the Japanese Yen’s aggressive appreciation could limit the Dollar’s gains and provide some support for Gold.

Nevertheless, Gold has demonstrated considerable resilience after rebounding from below the US$4,300 level on Friday. Historical price data showed Gold briefly falling to around US$4,295 before closing at US$4,349, indicating renewed buying interest as prices approached the support zone. This suggests that despite increasingly hawkish expectations for the Fed, demand remains strong enough to prevent a deeper correction.

Technically, the $4,300–$4,295 area remains a key support zone to watch. As long as Gold holds above this area, the metal still has room to rebound toward $4,400, followed by $4,430–$4,450 as the next resistance zone. Conversely, a decisive break below US$4,295 could open the door to further declines toward US$4,250–4,200. On the upside, a sustained break above US$4,450 would signal that buyers are beginning to regain control.

For today’s trading session, Gold remains neutral with a bearish bias, although there is no strong confirmation of a bearish trend yet. Markets remain in a wait-and-see mode ahead of the FOMC, leaving Gold highly sensitive to movements in Treasury yields and the DXY. If yields rise again and the Dollar strengthens, Gold could retest the US$4,300 support area. Conversely, if yields decline and the Dollar weakens, a rebound toward US$4,400–$4,450 remains possible.

Therefore, US$4,300 remains the key level for Gold today. Holding above this area could open the way for a recovery, while a break below it would increase the risk of a deeper correction. The market’s next major focus is the September 15–16 FOMC meeting, as both the rate decision and, more importantly, the Fed’s policy guidance will determine whether Gold’s rebound can develop into a new rally or face renewed selling pressure.(mrv)

Source: Newsmaker.id