Gold Price Forecast for the Near Term
Gold at the Fundamental Level
The US Federal Reserve cut interest rates by a quarter of a percentage point (25 basis points) to 4.25%. Powell indicated that the lack of data due to the federal government shutdown might make further rate cuts this year more difficult. Consequently, the dollar strengthened and gold declined following this announcement.
Markets are now indicating a 70% probability of another interest rate cut this year, down from near-perfect expectations before the Federal Open Market Committee's decision.
On the other hand, Trump stated that he agreed to reduce tariffs on China in exchange for Beijing resuming its purchases of US soybeans and maintaining the flow of rare earth exports. However, details remained vague, and China has yet to comment.
Gold absorbed this negative news from the Fed and the Trump-Xi summit, undergoing some downward corrections before beginning to rise again.
Gold at the Technical Level
Gold prices rose from support levels around $3,900 per ounce to reach the $4,000 level.
We still expect the upward trend to continue towards the $4029 level as an initial target. If the price breaks above $4030 and closes above that level, we anticipate a further rise towards at least $4100 per ounce.
This scenario would be invalidated if the price breaks below $4010 per ounce again.
