Gold News: Fed Policy and Inflation Data in Focus; Breakout Over $2790 Resumes Rally

Gold Prices Pause as Investors Eye Fed Decision and Wider Market Stability

Gold prices edged higher on Tuesday, stabilizing after Monday’s sharp selloff, though trading remains within the prior session’s range. The pause reflects investor indecision as focus shifts to key macroeconomic events, including the Federal Reserve’s first policy meeting of the year.

At 13:01 GMT, XAU/USD is trading $2749.90, up $9.25 or +0.34%.

Gold Stabilizes After Tech Selloff-Driven Decline

On Monday, gold suffered its largest drop in over a month, falling more than 1% as investors liquidated positions to offset losses in equities. The selloff was triggered by a sharp pullback in technology stocks, spurred by the emergence of Chinese startup DeepSeek’s low-cost AI model, which undercut expectations for AI giants. Stable equity markets in Europe and the U.S. on Tuesday supported gold prices, with UBS analyst Giovanni Staunovo noting that gold’s rebound reflects “stability in broader markets.”

Dollar Strength and Treasury Yields Add Pressure

The dollar firmed slightly on Tuesday, supported by U.S. tariff concerns and rising Treasury yields. The 10-year yield climbed 3 basis points to 4.567%, while the 2-year yield rose to 4.216%, as traders adjusted to hawkish rhetoric around inflation. Expectations for a Fed rate cut this week remain minimal, with CME FedWatch Tool pricing in a 99% chance of unchanged rates. However, President Donald Trump’s push for lower borrowing costs and looming tariff threats could fuel safe-haven demand for gold.

Technical Levels to Watch for Gold

Technically, gold’s main trend remains bullish, but downside risks persist. A break above the all-time high of $2790.17 would confirm a resumption of the uptrend, while immediate support lies at $2693.00–$2663.51, near the 50-day moving average at $2663.29. A breach of this zone could signal deeper losses if broader market sentiment sours.

Market Forecast: Cautious Optimism for Gold Prices

While gold remains under pressure from a firm dollar and higher Treasury yields, the ongoing uncertainty surrounding Federal Reserve policy, global trade tensions, and inflation expectations provides a supportive backdrop. Traders should monitor key economic data, including the Fed’s preferred inflation gauge due Friday, for directional cues. A sustained hold above $2693.00 would favor a bullish outlook, while a deeper correction could test lower support levels.

Gold prices are likely to remain sensitive to macroeconomic developments, with a cautious upward bias prevailing in the near term.

More Information in our Economic Calendar.