Gold's U-Turn: A Dive into Fundamentals & Trading Strategy

Hello, fellow traders! The gold market's moves last night were absolutely wild, not at all what one would expect. After hitting a new all-time high of $3,707.40/oz, gold surprisingly took a U-turn and dropped to $3,681.39/oz. And this happened right after the Fed cut rates by 0.25% as predicted! So, what exactly went down?

Fundamental Analysis: The Fed's Move and Powell's "Cool" Comments
Rate Cut as Expected: The Fed delivered the 0.25% rate cut, its first this year after a pause since late 2024. This action, along with the forecast for two more cuts, met market expectations and initially sent gold soaring.

USD and Bond Yields Drop: Lower interest rates tend to weaken the USD and pull down bond yields, making non-yielding assets like gold more attractive. This was the initial push for gold's new peak.

Powell's "Hawkish" Spin: Everything changed when Fed Chair Jerome Powell stepped up. He gave some surprisingly "hawkish" statements, suggesting the Fed isn't in a hurry to cut rates and that this move was just "risk management."

The Aftermath: This statement threw cold water on market expectations for a faster, more aggressive rate-cutting path. Powell was quite clever; he met market expectations and diffused political pressure (especially from the Trump administration), all while keeping investors on their toes. As a result, bond yields and the USD bounced back, putting strong selling pressure on gold.

Outlook: This shock might just be temporary. Fundamentally, the Fed starting a loosening cycle is a big long-term positive for gold. While gold might face some headwinds in the short term, the underlying bullish trend is still very much intact.

Technical Analysis: Volatility and Key Levels
Gold had some unpredictable swings after the news. After dropping to the $363x zone, it bounced back super fast. This shows that there's still solid buying power at these key support levels.

Key Support: $3624, $3612, $3600, $3584, $3569

Resistance: $3667, $3675, $3686, $3700

Today's Key Level: The $364x range. If gold holds above this level by the end of the European session, we should look for long positions for the US session.

Trading Setups (Remember to Manage Risk Strictly):

Buy Scalp
Zone: $3639 - $3637
SL: $3633
TP: $3642 - $3647 - $3652 - $3657 - $3667

Buy Zone
Zone: $3606 - $3604
SL: $3596
TP: $3614 - $3624 - $3634 - $3644 - $3664

Sell Scalp
Zone: $3674 - $3676
SL: $3680
TP: $3671 - $3665 - $3660 - $3655 - $3645

Sell Zone
Zone: $3686 - $3688
SL: $3696
TP: $3678 - $3668 - $3658 - $3648 - $3628

Note: The market is highly volatile. Be careful with every trade. Will gold continue its rally or see a deeper correction? Share your thoughts below! 👇

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