FOMC WEEK (15-18/06): GOLD RECOVERY OR BEARISH CONTINUATION?

Jun 14

After two consecutive weeks of heavy selling, gold plunged from the 44xx region down to 40xx, losing more than 4,000 pips in a relatively short period. The move was driven not only by economic data but also by a major shift in global capital flows and market expectations.

Although softer inflation readings were expected to support gold, investors largely stayed on the sidelines. Safe-haven demand failed to return in a meaningful way, while liquidity continued to leave the precious metals market. As a result, every recovery attempt was sold into, creating a persistent downtrend throughout the first half of June.

Toward the end of last week, however, gold finally found significant buying interest around the 402x support zone, a major daily support area that also aligns with an important Fibonacci extension level. From this region, price rebounded more than 200 points, suggesting that short-term selling pressure may be easing after an extended liquidation phase.

That said, this rebound should still be viewed as a corrective recovery within a broader bearish structure. The key question for next week is not how far gold can bounce, but whether capital will genuinely return to safe-haven assets.

MACRO OUTLOOK

The market narrative is shifting away from inflation and toward monetary policy and economic growth expectations.

The main event next week is the FOMC Meeting and Federal Reserve Interest Rate Decision on June 18. Markets overwhelmingly expect rates to remain unchanged, meaning investors will focus on the Fed's economic projections and guidance regarding potential rate cuts later in 2026.

Key events to monitor:

BOJ Policy Rate (June 16) – Potential impact on safe-haven flows across Asia.
US Retail Sales (June 17) – A key gauge of consumer strength and economic momentum.
FOMC Economic Projections & Fed Decision (June 18) – Likely to drive market expectations for the second half of the year.

Beyond economics, traders are closely watching geopolitical developments, particularly signs of easing tensions and possible progress toward a peace agreement between the United States and Iran.

If geopolitical risks continue to decline, demand for gold as a defensive asset could remain weak. This helps explain why recent rebounds have struggled to attract sustained institutional buying.

PRIMARY SCENARIO

Gold appears to be forming a temporary base around the 402x–410x region after an aggressive selloff.

In the short term, price may continue recovering toward overhead liquidity and resistance zones, particularly the 43xx–45xx Demand + Fibonacci areas highlighted on the chart.

However, as long as price remains below the major daily descending trendline and key liquidity zones overhead, the broader bearish structure remains intact. Current rallies should still be viewed as corrective moves within a larger downtrend.

If the Fed maintains a cautious stance and US economic data remains resilient, gold could face renewed selling pressure from those higher resistance areas before resuming its bearish trend.

ALTERNATIVE SCENARIO

If the Fed adopts a more dovish tone than expected, or if new geopolitical risks emerge that drive capital back into safe-haven assets, gold could extend its recovery from the current lows.

In that case, the market may attempt to reclaim the 43xx–45xx Demand + Fibonacci zones, with the potential to test the higher FVG liquidity area above.

Such a move would be the first indication that medium-term selling pressure is weakening and that the broader bearish structure may require reassessment.

SHORT-TERM BIAS

Bullish recovery from major support.

LONG-TERM BIAS

Still bearish while price remains below the major descending trendline and key liquidity zones overhead.

LucasGrayTrading 📉🔥

Jun 16

Trade active

Gold continues to follow the weekly roadmap closely. After forming a temporary bottom around the 40xx support region, price staged a strong recovery fueled by short-covering and improving risk sentiment. However, the rebound has now reached the key Demand + Fibonacci 0.5–0.618 zone, where sellers immediately returned and pushed the market lower by approximately 700 points.

This reaction confirms that the current recovery remains corrective rather than a confirmed bullish reversal. The broader Daily structure is still bearish, with lower highs and lower lows intact despite the recent rebound.

From a macro perspective, markets are now shifting their focus away from last week's geopolitical headlines and toward the upcoming FOMC meeting, which is the dominant catalyst of the week. Before that event, gold may continue trading in a balancing phase as institutions reposition and liquidity is redistributed.

An important observation is that gold still has an unfilled liquidity gap overhead, created during the aggressive selloff earlier this month. Markets often seek to rebalance these inefficiencies before establishing the next directional move. As a result, further upside retracement toward higher liquidity zones cannot be ruled out, especially if risk sentiment remains stable ahead of the Fed decision.

MARKET STATUS

✅ Demand + Fibonacci 0.5–0.618 successfully rejected price.

✅ Approximately 700 points of downside reaction from the projected resistance area.

✅ The broader Daily trend remains bearish despite the recovery from 40xx.

✅ An unfilled liquidity gap remains above current price and could attract short-term buying before FOMC.

⚠️ Until the Federal Reserve provides fresh guidance, gold is likely to remain trapped between liquidity rebalancing and the larger bearish structure.

CURRENT BIAS

Short-term: Neutral to bullish retracement while liquidity above remains unfilled.

Medium-term: Bearish below major Daily resistance and overhead Demand zones.

Key Theme This Week:
Liquidity rebalance first, FOMC direction second.

LucasGrayTrading 📈📉🔥

Jun 18

Trade closed: target reached

The weekly bearish scenario has activated almost perfectly.

Gold rallied into the 0.618 Fibonacci retracement resistance zone, aligning with the previously identified Demand area, before sellers regained control. The catalyst came from the Federal Reserve maintaining interest rates, reinforcing the market's view that monetary policy remains restrictive and reducing the urgency for safe-haven inflows.

From a macro perspective, the market continues to receive support from improving geopolitical sentiment and ongoing peace negotiation headlines. However, those positive developments have not been strong enough to offset the broader impact of a higher-for-longer rate environment.

Technically, the rejection from the 0.618 Fibonacci resistance confirms that the recent recovery was primarily a corrective move within a larger bearish structure. Price has now rotated back toward the support zones around 41xx–40xx, keeping downside liquidity targets in focus.

WEEKLY MARKET STATUS

✅ Bearish bias activated from the planned resistance zone.

✅ Fed rate decision strengthened USD stability and limited gold upside.

✅ Sellers defended the 0.618 Fibonacci area successfully.

✅ Gold remains below major weekly resistance despite recent recovery attempts.

The next key question is whether buyers can defend the current support cluster and build a stronger base, or if the market will continue seeking liquidity toward the lower 40xx region before establishing a more meaningful medium-term bottom.

Current Weekly Bias: Bearish below 43xx–44xx resistance.
Key Focus: Support reaction around 41xx–40xx ahead of the next major macro catalysts.

LucasGrayTrading 📉🔥