Gold market analysis

"Gold Prices Expected to Consolidate at High Levels Before Breaking Out" 11/12/2025 10:24 Finalized 

The Fed's interest rate decision pushed gold prices to break through upward. As expected by the market, the Fed decided to cut interest rates by 25 basis points after the interest rate meeting, lowering the target range of the federal funds rate to 3.5% to 3.75%, and planned to purchase short-term bonds to maintain the size of its balance sheet. However, the decision to cut interest rates this time was not unanimous. Miler suggested a half-point cut, while two other committee members advocated keeping the interest rate unchanged. 

The Fed's interest rate cut and bond purchase program have pushed up the price of gold. 

In the latest economic forecast, the Federal Reserve has slightly raised its growth forecast for this year from 1.6% to 1.7%, and significantly increased its forecast for next year from 1.8% to 2.3%. However, it has maintained its unemployment rate projections at 4.5% for this year and 4.4% for next year. Regarding inflation, the authorities have lowered their PCE inflation forecast for this year from 3% to 2.9%, and for next year from 2.6% to 2.4%. As for interest rates, the authorities expect the median federal funds rate target range to drop to 3.4% next year and to 3.1% in 2027. In other words, there will be two 25 basis point rate cuts in the next two years. However, such long-term forecasts are often revised in light of changes in the US economy and global situation, so investors can take the long-term interest rate target of 3% as the ultimate level. 

$4,220 is expected to be short-term support. 

The Federal Reserve's interest rate cut and purchase of short-term bonds have stimulated the rise of gold prices. The spot gold price has risen sharply from $4,193 to nearly $4,220, then fluctuated and fell, hitting a new intraday low of $4,181.77 before rising sharply again. At the end of trading in New York, it rose to $4,238.67 and then pulled back to find support at $4,221.67. After consolidation, it rose again and reached a high of $4,247.79 in the early Asian session today. As the gold price has broken through the neckline of the head and shoulders bottom pattern mentioned yesterday and closed above $4,220 on the hourly chart, it is likely to test the Gann angle at $4,260 in the short term, as well as the measured upside target of the head and shoulders bottom pattern at $4,268.7. 

However, another risk factor to consider is that since the market already knows the Fed's monetary policy is dovish, there is no need to chase gold at relatively high levels. Instead, it is advisable to operate within a broader comfort zone to increase profits. The short-term support level is at $4,220, but $4,200 is likely to be a level that bulls will defend. The $4,300 mark or another important Gann angle at $4,310 is expected to be a short-term resistance. If bulls are preparing to launch a new offensive, they must accumulate positions again. Therefore, it is likely that the gold price will consolidate between $4,200 and $4,300 for a period of time, waiting for the opportunity to break through. In this case, the support zone for spot gold is expected to be between $4,200 and $4,220, while the resistance zone is likely to be between $4,280 and $4,300. 

The above content is for reference only and does not constitute investment advice.