Hey everyone, welcome back. This Thursday, the Federal Reserve will announce its next interest rate decision — and this could trigger major volatility across global markets, especially gold, which is trading around 4,206 dollars per ounce right now.
“Markets are pricing in nearly a 90% chance that the Fed will cut rates by 0.25%. Inflation has cooled, economic momentum is slowing, and the Fed may need to ease policy. But this is only the expectation — any surprise can move gold violently.”
“So here are the three key scenarios for XAU/USD as we head into the Fed decision.”
Scenario 1: Fed cuts 0.25% → XAU/USD bullish bias
“If the Fed cuts by 25 basis points as expected, the dollar may weaken, yields may fall, and gold typically pushes higher.
With gold currently around 4,206, a healthy pullback into the 4,185–4,195 zone could attract buyers. Upside targets for this scenario often sit around 4,230–4,250.
This avoids jumping in during the initial spike and helps reduce risk.”
Scenario 2: Fed holds rates → XAU/USD may drop sharply
“If the Fed unexpectedly keeps rates unchanged, that would shock the market. The dollar could strengthen quickly, and gold may drop toward 4,160–4,175 within minutes.
This setup is usually favored by experienced news traders because price can whip violently.”
Scenario 3: Fed cuts 0.50% → Explosive XAU/USD breakout
If the Fed cuts by a larger-than-expected 50 basis points, markets would read it as a sign the Fed is worried about economic weakness. The dollar could slide aggressively, and gold might rally 40 to 70 dollars in the same session.
In this case, traders often look for a breakout above 4,255–4,265, aiming toward 4,290–4,310 — but stop-loss discipline is crucial.
So in short: gold could rise, fall, or explode depending on how aggressive the Fed becomes. The key isn’t predicting the news — it’s preparing your scenarios and reacting with discipline.
If you want real-time updates right after the Fed announcement — including live levels on gold, the dollar, and what to watch next — don’t forget to hit Like, Subscribe, and turn on the notification bell.
Comment below which scenario you think is most likely, and I’ll break it down for you.
