Gold (XAU/USD) Price Forecast: Fed Sparks Volatility – Pulls Back From $3,707 Peak

Gold Reverses Lower After Record High

Gold triggered a one-day bearish reversal on Wednesday, breaking below Tuesday’s low after briefly touching a new record high of $3,707. The volatility followed the Federal Reserve’s rate decision and forward guidance, which fueled sharp swings across markets. By the afternoon session, sellers had regained control, keeping trade in the lower third of the day’s range. A close below $3,675 would confirm a bearish outside day, marking a notable shift in near-term momentum.

Rising But Cautious Momentum

Although gold notched another record on Tuesday, momentum had already been showing signs of fatigue, reflected in a narrow-range session despite the breakout. Price remains within a resistance zone defined by multiple technical markers and prior hesitation around the $3,675 level. From the $3,311 swing low in late July, gold advanced by $396, or nearly 12%, with only three brief one-day pullbacks along the way. While this reflects strong demand, it also raises the risk that the market may be due for a deeper corrective phase, until recently when there were two days of lower highs and lower lows.

Short-Term Support Under Pressure

For most of its advance, gold has held above its rising 8-Day moving average, currently at $3,651. That price area was successfully tested today with the day’s low of $3,646. A decisive close below today’s low would also represent a break beneath the 8-Day average, signaling short-term weakness. Furthermore, a decline through Monday’s low of $3,627 would add further downside confirmation as that day’s low also found support around the 8-Day average.

Key Downside and Upside Levels

Should sellers press their advantage, support levels to monitor include last week’s low at $3,576 and the 38.2% Fibonacci retracement at $3,557. The 20-Day moving average, now rising at $3,532, may align with that retracement and may serve as the next dynamic support. On the other hand, if bulls regain control with a decisive rally above today’s $3,707 high, upside targets reemerge at $3,734, followed by a confluence zone between $3,782 and $3,812.

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