Gold Futures May Slip Further as Traders React to Fed Signals

After reviewing the movements of the gold futures in daily charts, I anticipate that the gold futures have lost some recent gains after the Fed’s decision on Wednesday as the Fed remains dovish despite a rate cut interest rates by a widely expected 25-basis-point, with Chair Jerome Powell signaling a higher bar for future rate cuts.

However, in a move widely viewed as dovish by the markets, the Fed announced that it will resume buying Treasury bills to increase market liquidity, at an initial pace of $40 billion per month.

The Fed’s asset buying operation, termed by many as “quantitative easing”, is expected to increase market liquidity in the coming months and points to a dovish outlook for monetary policy. Treasury yields fell after the Fed’s announcement.

I find that the decision did not come as “hawkish” as some market participants had worried about. In consideration of the updated economic projections, Powell’s comments on the neutral rate, and the unchanged median dots, indicate one 25-basis-point cut in 2026.

Gold Futures 5-Hr. Chart

Gold Futures Daily Chart

Gold futures mainly rose in the run-up to the Fed’s meeting and look ready to face some profit-taking after the central bank’s decision. Gold futures tested a high at $4,272.71, but faced a sharp selloff that pushed the futures to test a low at $4209 on Wednesday.

On Thursday, despite opening with a gap-up at $4261.70, and after testing a day’s high at $4277.70 and a low at $4231.50, currently trading at $4244.85 look ready to shed some more if finds a breakdown below the immediate support at the 9 DMA ($4226.14) where a breakdown below this support could push the futures to test the next support at the 20 EMA ($4191.50).

I find that a sustainable move below the 20 EMA could push the futures to test the next support at the 50 EMA ($4080), from where some reversal might be there, but a breakdown below this significant support could push the futures to test the next support at the 100 EMA ($3890).

Inversely, only a sustainable move above the immediate resistance at $4291 could accelerate bullish momentum, and some sustainable moves could accelerate the uptrend.

Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based only on observations.