As expected, the US Federal Reserve kept interest rates unchanged, and gold prices plummeted after the Fed released its meeting statement and economic projections. This was mainly because the dot plot showed that more than half of Fed officials expect a quarter-point rate hike before the end of the year. On the other hand, the Fed simultaneously raised its inflation forecast, with officials expecting the core personal consumption expenditures price index to rise from 2.7% to 3.6% this year and remain at 2.3% next year. They anticipate that US inflation will not fall to the target level until 2028. Furthermore, Fed Chairman Warsh reiterated the Fed’s commitment to maintaining price stability. Given the Fed’s high level of vigilance regarding inflation and its clear stance against it, risk-taking in gold purchases may be under pressure in the short term, potentially requiring repeated tests of support around $4,222 before a significant rebound.

A position can be established around $4,222, with a short-term target of $4,336 for profit-taking and a stop-loss at $4,202.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com