Gold endured a volatile week as traders took profits following the Federal Reserve’s widely anticipated 25-basis-point rate cut, but resilient safe-haven demand has kept the bullish trajectory intact, with $4,000 still firmly in sight.
From Record Highs to Sharp Reversal
Bullion surged to a fresh record of $3,707.42 per ounce after the Fed lowered rates to 4.25%. However, the rally was short-lived as profit-taking knocked prices back by $80 to $3,627.
Fed Chair Jerome Powell described the move as a “risk management cut,” tempering expectations of an aggressive easing cycle. Markets had been pricing in as much as 150 basis points of cuts this year, but Powell’s cautious tone suggested a slower path ahead.
Dollar Recovery Pressures Gold
The immediate aftermath of the Fed decision saw the dollar weaken and gold strengthen. Yet, as Powell highlighted persistent consumer demand and labour market risks, the US dollar recovered, pulling gold lower in response.
Despite the pullback, underlying demand remains strong. Central bank buying—especially from China—alongside ongoing geopolitical risks continues to support bullion’s longer-term appeal.
Buyers Return as Technicals Hold
By week’s end, buyers had stepped back in. Gold rebounded nearly $60 from its lows, closing near $3,685, with the 20-day moving average acting as reliable support. Technical analysts now see $4,000 as the next key upside target, so long as prices hold above short-term averages.
Looking Ahead
Traders will be watching the upcoming US PCE inflation data for fresh clues on Fed policy. Softer inflation readings could reignite dovish sentiment and provide the next catalyst for gold to push higher.
