FxWirePro- Fed rate decision and its impact on gold price

Gold pared some of its gains ahead of Fed monetary policy. It hit a fresh all-time high of $2589 and is currently trading around $2584.30.

Bullish scenario-

If the fed cuts rates by 25 bpbs with a dovish tone (more rate cuts in future ) or cuts by 50 bpbs . It would take the yellow metal to a new high.

Bearish scenario-

If Fed cuts rates by 25 bpbs with hawkish tones (limited rate cut) would drag the yellow metal to $2540/$2520.

Extreme bearish -

If Fed leaves rates unchanged. The yellow metal would crash drastically to $2450/$2350.

According to the CME Fed watch tool, the probability of a 50 bpbs rate cut in Sep increased to 67% from 14% a week ago.

Technical:

The near–term support is around $2560, a break below the target of $2544/$2535/$2520/$2470. Major bearish continuation only below $2470.The yellow metal faces minor resistance around $2590 and a breach above will take it to the next level of $2622/$2650.