The Federal Reserve has implemented a 25 basis point rate cut as anticipated, with the summary of economic projections, commonly referred to as the dot plot, indicating that policymakers expect two additional rate reductions this year. The market interpreted this as dovish guidance, leading to a broad decline in the U.S. dollar and a surge in gold prices to record highs. However, following Fed Chair Jerome Powell's cautious remarks during the post-meeting press conference regarding further easing measures, the dollar and U.S. Treasury yields rebounded strongly. According to Reuters, Powell expressed a cautious outlook on future rate cuts, stating that "this policy action is a risk management measure in response to a soft labor market, and the Federal Reserve is currently in a 'meeting-by-meeting' stance." The resurgence in dollar demand and the Fed's restraint prompted a correction in gold prices, which had previously been driven by negative yields. Based on CME Group's tools, traders currently assign an 87.7% probability of a 25 basis point rate cut at the October FOMC meeting, up from 74.3% the previous day. Given the persistent dovish expectations surrounding the Fed, any declines in gold prices may be viewed as attractive buying opportunities, supporting the continuation of its upward trend. The market is currently awaiting fresh trading momentum from the upcoming U.S. mid-term unemployment claims data. Additionally, geopolitical developments and comments from U.S. President Donald Trump may also influence gold price movements over the coming trading days.

FOMC officials anticipate an additional 50 basis point rate cut by the end of 2025, slightly above their June projections. In this voting cycle, 11 out of 12 members supported a 25 basis point reduction, with the sole dissenting vote from newly appointed Governor Stephen Miran, advocating for a larger 50 basis point cut. Notably, Governors Waller and Bowman, who previously dissented, supported the rate cut in this vote, indicating a strengthening of consensus within the committee, though some divergence in policy stance persists. Chair Powell explicitly stated at the press conference that softening labor market conditions are the primary consideration for the rate reduction. He highlighted that the three-month moving average of non-farm payroll gains has fallen to 29,000, below the "equilibrium level" necessary to maintain stable unemployment, and candidly acknowledged that current employment conditions can no longer be described as "very robust." This statement underscores the Federal Reserve's heightened concern regarding the trajectory of the employment sector.

The gold price experienced a breakout above the 4H Bollinger upper band and reached a new historical high before encountering resistance and retracing. Currently, it is supported near the EMA50, forming a consolidation pattern. The MACD line and signal line form a death cross, and the bullish momentum histogram is gradually diminishing, signaling a potential bearish divergence. The RSI stands at 39, with decreasing peaks, indicating growing market pessimism. If the price maintains support at the EMA50, upward movement toward 3,750 or even 4,000 remains possible. Conversely, failure to hold this level could lead to a decline toward the Bollinger lower band and previous lows around 3,630 and 3,613. In the 1W timeframe, after breaking above the triangle consolidation pattern, the price has surged along the Bollinger upper band. Currently, the Bollinger bands are widening upward, with the SMAs diverging and a golden cross on the MACD. The RSI is at 71, entering overbought territory, suggesting a possible correction. Overall, a retest of the triangle's upper boundary before a further breakout is plausible, but as long as the price remains above the EMA12, the upward trend remains intact. It is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 3630

Target Price: 3900

Stop Loss: 3500

Support: 3600, 3550, 3400

Resistance: 3700, 3800, 3900