Gold prices have retreated from their weekly high of around $4,070 on Wednesday, ending a two-day winning streak as traders await the US Federal Reserve's policy decision. The Fed is widely expected to keep interest rates unchanged, but the focus will be on the accompanying statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference. The CME Group's CME FedWatch Tool shows that traders are pricing in over an 80% chance of a rate hike in December, which is weighing on the non-yielding bullion.
Strategists at BNY Markets expect the Fed to stand pat this week but caution that there could be dissent in favor of raising rates. They believe that if there is an objection, the market will interpret the decision as hawkish, solidifying expectations for a December hike. Meanwhile, geopolitical risks, including tensions in the Middle East and elevated energy prices, are supporting the US Dollar and adding to the downward pressure on gold.
Technically, the XAU/USD pair is holding just above the 100-hour Exponential Moving Average at $4,044.21, which is providing some support. However, the Relative Strength Index (RSI) around 55 suggests only modest bullish momentum, and the Moving Average Convergence Divergence (MACD) has slipped into negative territory, hinting that upside attempts may be losing traction. A break below the immediate support could expose the 23.6% Fibonacci retracement at $4,030.07, with a deeper pullback potentially targeting the structural floor around $3,976.72.
The US Dollar has been the strongest against the New Zealand Dollar this week, with percentage changes against other major currencies ranging from 0.01% against the Australian Dollar to 1.48% against the New Zealand Dollar. The heat map shows the percentage changes of major currencies against each other, with the base currency picked from the left column and the quote currency from the top row.