Gold Prices Face Volatility as Market Weighs Fed Policy and Global Growth

Market Volatility and Key Support

Gold prices have shown significant two-way price action today, struggling to find a clear direction. While the metal remains well-supported by its safe-haven status, the lack of immediate bullish catalysts has led to profit-taking. Technical analysts point to the $4,280 level as critical support; a breach below this could trigger a deeper correction, while holding above keeps the bullish trend intact.

Interest Rate Speculation

The primary driver of the current price action is the shifting sentiment around US monetary policy. Recent data suggests inflation is moderating, but not fast enough to guarantee aggressive rate cuts. This uncertainty is keeping the dollar relatively strong, acting as a headwind for gold. Investors are now looking toward next week's economic releases for clarity on the Fed's pivot timeline.

Global Demand Trends

Despite the short-term noise, physical demand from central banks remains a strong pillar of support. Reports indicate continued accumulation by emerging market central banks, aiming to diversify reserves away from fiat currencies. This structural buying is preventing any major collapse in prices, even as speculative interest wavers in the futures market.