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Gold Shines Amid Dovish Fed: Key Price Movements and Trading Strategies

Gold prices gained momentum despite the dovish Fed. It hit a high of $2772  and currently trading around $2762.

The Federal Reserve kept the interest rates at a range of 4.25% to 4.50% on January 29, 2025. This has come after consecutive rate cuts throughout 2024 and is relatively dovish. Fed Chair Jerome Powell said the economy is growing, but then added, "Inflation remains a problem.". The Fed will now cut the interest rate only slowly and if unmistakable signs of economic trouble develop. Stock markets fell slightly immediately after the news, and Treasury yields rose to reflect the impression that investors will pay close attention to Fed moves. The Fed will employ various tactics, including managing repurchase agreements, to keep the target rate on course. Overall, market expectations for interest cuts in 2025 have shifted to a more cautious outlook.

Rate Pause Sentiments Climb

According to the CME Fed Watch tool, the chances of a rate pause on the Mar 19th, 2025 meeting have increased to 83.20% up from 73.20% a week ago.

Technical Analysis: Key Levels and Trading Strategy


Gold prices are holding above short-term moving averages 34 EMA and 55 EMA and long-term moving averages (200 EMA) in the 4-hour chart. Immediate support is at $2745 and a break below this level will drag the yellow metal $2720/$2700/$2670/$2660/$2650/$2,630,$2600/ $2,570, $2,559, $2,536, and eventually $2,500. The near-term resistance is at $2775, with potential price targets at $2790/$2810. It is good to buy on dips around $2725-27, with a stop-loss at $2700 for a target price of $2790/$2810.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

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