Fed Decision Could Decide Gold's Next Move

The Federal Reserve's interest rate decision on September 16 could significantly impact gold prices. Traders are watching for signs of a breakout or rejection in the XAUUSD market after the FOMC announcement.

With a 25-basis-point hike expected by markets, the key question is whether Fed guidance and US dollar trends push gold below $4,355 or give it enough momentum to break above $4,388. The gold price has rebounded from $4,300 to $4,335-$4,345 as markets price in a 25-basis-point hike.

A hawkish surprise could lead to higher yields and a stronger dollar, putting pressure on XAUUSD, while a relatively restrained or 'one-and-done' message could ease yield and dollar pressure, supporting a relief rally. At press time, spot gold was trading at $4,341.5.