Gold Market Faces Resistance Amid Fed Rate Hike and Inflation Concerns

The gold market is experiencing flat trading, stuck at $4,372 after a modest gain. The Federal Reserve's recent decision to raise its benchmark rate by 25 basis points has complicated the outlook for gold.

Persistent inflation concerns and policy uncertainty are keeping gold demand reactive to future monetary signals, as investors weigh the opportunity cost of holding non-yielding assets like gold against the potential benefits of a hedge against inflation.

Despite showing short- to medium-term bullish momentum, gold is facing overbought conditions, with technical indicators such as MACD and ADX showing strong bullish momentum but also numerous overbought oscillators suggesting the risk of near-term exhaustion and potential divergence.