'Gold Price May Rise To $3,090': Bullion Watchers Eye Fed Guidance Amid Likely Pause On Rates
Gold's momentum may remain intact if the Fed sticks to its rate cut path for this year despite maintaining status quo for now, analysts said.
Gold prices will remain in focus for the remainder of this week, as the safe-haven asset is highly reactive to the interest rate decision taken by the US Federal Reserve.
While the American monetary policy authority is widely expected to hold the rates steady in the range of 4.25-4.5%, its guidance on future rate cuts will be the key driver of gold prices in the near term. The rate decision will be announced at 2:30 pm EST (11:30 pm IST) on Wednesday, which will be followed by Fed Chair Jerome Powell's guidance.
The appeal for gold, as an investment asset, generally rises with projection of more frequent rate cuts. This is because lower interest rates augur well for non-yielding assets like bullion.
"The Fed is expected to hold rates steady, but Powell’s guidance on future policy moves will be critical. If the Fed signals it remains on track for rate cuts, gold could resume its upward momentum," said Rahul Kalantari, vice president - commodities, Mehta Equities Ltd.
However, if policymakers push back against easing expectations, gold prices may see further consolidation, he explained, while responding to NDTV Profit's queries.
A "hawkish-than-expected commentary" from Powell could shake market expectations and lead to a "brief pullback in gold prices" in the near term, noted Kaynat Chainwala, assistant vice president for commodity research at Kotak Securities Ltd.
Traders, however, are growing more confident of rate cut in June following softer US inflation data and signs of softness in the once-resilient jobs market, she added.
Retail inflation in the US eased to 2.8% in February from 3% in the preceding month. Also, a report released by the US Labor Department on Friday showed average monthly job growth eased to 138,000 per month in 2025 so far, as against 209,000 in the October-December quarter of 2024. Both these statistics support the case for the Fed to remain firm on its rate cut path, as per a section of analysts.
Key Gold Price Levels To Watch
Traders are expecting three interest rate cuts this year, and if the Fed remains on the same path, then the price of gold is poised to rise significantly this week, the analysts said.
From a weekly perspective, key levels to watch on the New York-based Commodity Exchange would be $2,990 per ounce as support, "while prices may surge to $3090 per ounce on the upside", Chainwala said, while responding to NDTV Profit's queries.
On India's Multi Commodity Exchange, the support for gold is seen at Rs 87,500 per 10 grams, whereas Rs 90,000 per 10 grams would act as a key resistance level, she added.
According to Kalantari, gold has support at $2,984-2,950 an ounce while resistance is at $3,065-3,088. On the MCX, gold has support at Rs 87,640, while resistance at Rs 89,940-90,740, he added.
Notably, gold has seen an upward trend in recent period, as economic uncertainty fuelled by US President Donald Trump's tariff policies has supported the precious metal. The bullion rates have also been aided by the prevailing geopolitical tensions in eastern Europe and the Middle East. They have risen by over 15% in 2025 so far, and are up 40% in the one-year period.
Spot gold in the international market was trading 0.19% higher at $3,040 an ounce at 12:50 pm (IST), whereas, MCX gold was trading 0.23% higher at Rs 88,930 per 10 gram at the same time.
