Gold Prices Have the Chance to Rise Again, Investors Pay Attention to the Policy Direction of the Fed

The movement of world gold prices (XAU/USD) in today’s trading is still dynamic with a tendency to move unstable. After previously recording an all-time high above the US$5,500 per ounce area, gold prices experienced quite deep correction pressure. This decline was triggered by a combination of strengthening the United States dollar and weakening interest in safe haven assets, along with the release of a number of US economic data and the latest developments regarding the Federal Reserve’s monetary policy. Even though it was under pressure, gold is starting to show limited recovery efforts, which indicates buying interest from market players at lower price levels.

Based on the analysis presented by Andy Nugraha from Dupoin Futures, the current gold price correction can still be categorized as a normal adjustment phase. From a medium to long term trend perspective, the direction of gold’s movement is considered to still be in a bullish structure. The selling pressure that emerged was more influenced by the strengthening of the US dollar, after the market adjusted expectations for potentially tighter monetary policy in the near future. Apart from that, the emergence of the name of a hawkish figure such as Kevin Warsh as a candidate for Chair of the Fed also added temporary pressure to gold, because it triggered an increase in bond yields and increased the attractiveness of dollar-based assets.

Even though this sentiment has a negative impact in the short term, Andy Nugraha emphasized that the existing pressure is not strong enough to reverse the main trend in gold as a whole. If market conditions become conducive again and risk appetite begins to improve, gold prices have the opportunity to continue their upward movement. In a positive scenario, XAU/USD is projected to head to the 5,282 area next week. This level is seen as an important technical target, especially if the price is able to stay above the dynamic support area and the buying impulse strengthens again.

However, Dupoin Futures also reminded market players to continue to anticipate possible negative scenarios. If gold prices experience a deeper reversal and penetrate the key level around 4,368, then continued selling pressure has the potential to bring prices down towards the 4,033 area in the coming week. This scenario could occur if the US dollar continues its strengthening, supported by United States economic data released that is more solid than market estimates. This condition has the potential to strengthen expectations of tight monetary policy, thereby suppressing gold price movements.

From a fundamental perspective, the prospects for gold in the medium to long term are still considered quite promising. One of the main factors supporting this positive outlook is the Fed’s expected cut in interest rates throughout 2026. A reduction in interest rates will generally suppress real yields and reduce the opportunity cost of holding gold, thus making this precious metal attractive again to investors. In addition, demand for gold as a hedging asset is still relatively strong, especially from institutional investors and global central banks who continue to diversify their foreign exchange reserves.

A number of major world banks also maintain positive projections for gold prices in the annual term, even though short-term volatility is quite high due to the dynamics of monetary policy. This shows that fundamentally, demand for gold is still considered solid and not easily eroded by momentary sentiment.

In the future, the direction of gold price movements is expected to depend heavily on the release of key United States economic data, such as employment reports, inflation, as well as developments in CPI and real yields. These data have the potential to trigger significant movements, especially if the results deviate far from market expectations. Therefore, market players are advised to continue to monitor fundamental and technical developments in a balanced manner as a basis for determining gold transaction strategies amidst market conditions that are still full of uncertainty.

This article also appeared on VRITIMES