Gold News: Rate Cut Bets and QT Talk Spark Gold Rally From 3-Week Low

Gold Price Forecast: XAU/USD Bounces from $3886.46 Low as Traders Eye Fed Rate Cut and Powell Commentary

Spot gold (XAU/USD) is clawing back ground on Wednesday after bouncing from a minor bottom at $3886.46. The recovery comes as traders brace for the Federal Reserve’s interest rate decision and a critical press conference from Chair Jerome Powell. The metal is currently trading toward the minor pivot at $4133.95, a level that could either cap gains or trigger further upside acceleration if cleared.

At 12:54 GMT, XAUUSD is trading $4024.87, up $71.87 or +1.82%.

Gold Rebounds Nearly 2% on Bargain Buying Ahead of Fed Decision

Gold has rallied nearly 2% intraday, reversing a three-week low set on Tuesday. The move is being driven by bargain-hunting following a more than 10% drawdown from October’s all-time high of $4381.44. Analysts note that central bank reserve managers may also be stepping in to buy the dip. Peter Fertig of Quantitative Commodity Research pointed out the continued appeal of gold’s long-term narrative, particularly given renewed geopolitical and monetary policy uncertainty.

Fed Rate Cut in Focus, Powell’s Tone Key for Gold Bulls

The Federal Reserve is widely expected to deliver a 25 basis point rate cut today, bringing the target range to 3.75%–4%. Market pricing via the CME FedWatch Tool shows traders are nearly unanimous in expecting another cut in December. With hard economic data sparse due to the ongoing U.S. government shutdown, Powell’s forward guidance will carry added weight. Any dovish tone—especially concerning the end of quantitative tightening—could reinforce the case for further gold gains.

Several banks, including Bank of America and Deutsche Bank, now expect the Fed to wrap up QT this month. Signs of liquidity stress in repo markets have led some strategists, like Krishna Guha at Evercore ISI, to forecast Fed asset purchases resuming as early as 2026. These developments suggest a softer policy stance is taking shape, which would favor non-yielding assets like gold.

Dollar Strength and Trade Optimism Limit Gold’s Upside

At the same time, a firmer U.S. dollar is acting as a headwind. The greenback gained ground Wednesday as optimism grows around a potential U.S.-China trade truce ahead of Thursday’s meeting between Presidents Trump and Xi in South Korea. Safe-haven demand for gold typically weakens on improving trade sentiment, and traders are watching whether the dollar’s rebound has more room to run.

Gold Price Outlook: Bullish Bias Holding Above $3846.50 Support

Near term, the bias stays bullish while gold holds above the 50% retracement at $3846.50. A deeper pullback could attract stronger buyers at the 50-day moving average, currently at $3796.57. On the upside, a clean break above the $4133.95 pivot would open the door for a retest of prior swing levels. All eyes remain on Powell’s tone—any signs of policy easing beyond the cut would likely keep gold well bid into year-end.

More Information in our Economic Calendar.