Gold (XAU/USD) Price Forecast: Coils Above $4,164 – Fed Decision to Spark Breakout

Pre-Fed Consolidation Continues

Gold spent another session Tuesday in tight consolidation above the established seven-day support zone around $4,164, with the daily low of $4,170 landing precisely at the confluence of the primary uptrend line and the long-term rising channel top—now acting as support after previously capping advances. Price traded both sides of the 10-day average (currently $4,199) but remains positive on the day and likely to close back above the line, reinforcing confidence that the $4,164 area can continue holding into the Fed announcement.

Classic Range Contraction

The ongoing low volatility environment reflects classic range contraction that historically precedes sharp expansion. With gold still in a clear uptrend across all timeframes, the base-case expectation remains for an eventual bullish breakout once the catalyst arrives. The 20-day average at $4,152 has flattened after rising steadily, mirroring the current momentum lull but still providing the next major dynamic support layer beneath price.

Trendline Support Significance

Tuesday’s bounce from the exact intersection of the uptrend line and long-term channel boundary—combined with a probable positive close—can often mark a meaningful turning point. With the Federal Reserve decision and updated economic projections due Wednesday, the setup strongly favors a bullish volatility spike out of the current compression.

Upside Confirmation Levels

An initial move above Tuesday’s $4,221 high would signal early strength, but a decisive breakout and close above the recent swing high of $4,264 is required to confirm resumption of the advance that began from October’s low. That trigger would immediately target the $4,356 measured move completion—matching the first leg’s appreciation—followed by the $4,381 record high and the 127.2% second-leg projection.

Downside Contingency

Only a breakdown through the 20-day average zone would shift focus lower toward the rising 50-day average at $4,090—an area untouched since its late August reclaim and expected to offer robust support if tested.

Outlook

Gold has coiled tightly above major trendline confluence and key averages while awaiting the Fed catalyst. A bullish reaction Wednesday keeps $4,264–$4,356 in play minimum; hold the 10-day and 20-day averages on any weakness and the larger uptrend stays fully intact with expansion overwhelmingly favored to the upside.

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