Gold Prices Rally After Fed Reversal, But Cautious Outlook Remains

Gold prices have staged a sharp recovery after initially falling in response to the Federal Reserve's hawkish stance on interest rates.

The reversal, which has seen gold regain its pre-FOMC levels, has raised questions about the metal's next move.

Despite the technical bullish signal from the breakout of the falling wedge pattern, analysts at Stonex are cautious in their outlook, citing the fundamental backdrop remaining tied to oil prices and bond yields.

The Middle East situation remains unresolved, which could lead to a resurgence in oil prices and inflation concerns, making it difficult for gold to thrive.

From a technical perspective, key resistance levels stand at $4,400, $4,500, and $4,565, while support is seen around $4235 and $4,100.