Gold (XAU/USD) is showing moderate intraday gains, gradually moving above the 200-day EMA. As the US dollar has pulled back from its two-week high, this has provided some additional support for the precious metal. However, traders appear to be taking a wait-and-see approach, refraining from opening large directional positions ahead of key events related to central bank decisions.
Today, the September meeting of the US Federal Reserve will conclude, and analysts expect a 25-basis-point interest rate hike. The main focus should be on the Fed's updated economic projections, including the so-called dot plot. Comments from Fed Chair Kevin Warsh at the press conference will also be important, as they may provide useful signals about the future direction of monetary policy. These projections will have a significant impact on the short-term dynamics of the US dollar and may trigger a new impulse in gold prices.
Meanwhile, inflation risks associated with rising energy prices are increasing expectations of tighter Fed monetary policy. In particular, on Tuesday, crude oil prices reached their highest levels since May 20 amid growing concerns about supply disruptions from the Middle East. An additional source of tension has been the sharp increase in government and corporate borrowing, which has triggered a sell-off in the global bond market; the yield on 10-year US Treasury bonds exceeded 5% for the first time since 2023, reaching its highest level since 2007.
If the price continues to rise, it may encounter initial resistance at the 9-day EMA, followed by the round-number level of $4,400, which may also act as resistance, and the 20-day SMA near $4,450.
In the event of a decline, the nearest support is at the 50-day SMA. A break below this SMA would open the way to deeper losses.
The table below shows the percentage change in the US dollar's exchange rate against major currencies today. The US dollar recorded its strongest appreciation against the Canadian dollar.