Fed Rate Hike May Boost Gold Prices as BTC/USD Faces Critical Test

The Federal Reserve is expected to raise interest rates for the first time in three months as it tackles persistent inflationary pressures and geopolitical risks. The Fed may deliver a one-off rate increase accompanied by a dovish split in the updated dot plot, which could lead to a US dollar sell-off and help gold prices bounce towards its 20- and 200-day Simple Moving Averages (SMAs) at $4,450 and $4,540, respectively.

However, if the Fed's communication is hawkish, emphasizing that the current policy is not constraining the economy enough, it may break gold's neutral short-term structure below its 50-day SMA at $4,257. This could open the path towards $4,150 and potentially deeper declines targeting the critical $4,070 key zone.

The Bank of England is widely anticipated to hold its benchmark rate flat at 3.75% via a steady 6-3 vote split. However, money markets still price in a potential rate hike by year-end following the recent spike in energy prices. A hawkish hold that leaves the door open to future tightening could allow GBP/USD to establish a firm footing near its 50-day SMA and target a bullish reversal toward the 20-day SMA at $1.3550.

The delayed Clarity Act vote in the US Senate will be a critical test for crypto markets on Tuesday. If the regulation passes, it would serve as a key bullish catalyst for Bitcoin (BTC). A decisive close above its 20-day Simple Moving Average (SMA) at $78,540 may help BTC/USD re-enter the $80,000 area and bring September's high at $82,260 into focus.