Gold (XAU/USD) remains steady on Tuesday, extending the sideways consolidation that has dominated trade for more than a week as investors stay cautious ahead of the Federal Reserve’s (Fed) policy decision on Wednesday. At the time of writing, XAU/USD is trading near $4,205 after dipping toward $4,170 earlier in the European session.
The two-day Federal Open Market Committee (FOMC) meeting begins later on Tuesday, with markets widely expecting another rate cut following September and October’s back-to-back “risk-management” reductions in response to signs of labour-market cooling. CME FedWatch Tool pricing shows nearly a 90% probability of a 25 basis point (bps) cut, which would bring the Federal Funds Rate to the 3.50%–3.75% range.
Expectations for a dovish outcome are pressuring the US Dollar (USD) and supporting bullion. However, with the rate cut almost fully priced in, traders are focused on forward guidance as speculation grows around a potential “hawkish cut,” reflecting uncertainty over the policy path heading into 2026.
Market movers: Fed’s next move under scrutiny amid mixed signals
The US Dollar Index (DXY) is consolidating around 99.00 after a modest uptick on Monday. Even with a cut largely expected, policy uncertainty remains high. Fed Chair Jerome Powell delivered a cautious tone in October, warning that “another reduction in December is not a foregone conclusion,” and highlighting growing internal debate over whether to delay further easing.
Committee members remain divided: some warn that inflation risks persist, while others point to a gradual cooling in labour conditions. Recent Personal Consumption Expenditures (PCE) data and mixed employment indicators reinforce the possibility of a more measured pace of easing as disinflation progress slows.
Tuesday’s data releases include the ADP Employment Change 4-week average and the delayed JOLTS Job Openings for September and October, which will offer fresh clarity on labour-market momentum ahead of the Fed decision. Geopolitical risk continues to provide a supportive backdrop for Gold as well. After meetings with European leaders in London on Monday, Ukrainian President Volodymyr Zelenskiy said Kyiv will present a revised 20-point peace plan to the United States, reiterating that no agreement has been reached on territorial concessions – an issue Moscow continues to press.
Technical analysis: neutral momentum keeps Gold capped below $4,250
Gold (XAU/USD) continues to trade within a narrow band, with buyers defending the $4,200–$4,180 area. On the 4-hour chart, the 50-period Simple Moving Average (SMA) is acting as near-term resistance around $4,205, while the 100-period SMA near $4,148 serves as the next meaningful support should bears push below the lower end of the range.
On the upside, the $4,250 zone remains a firm barrier where bullish momentum repeatedly stalls. A decisive breakout above this level would strengthen the bullish bias and open the way toward a retest of all-time highs. Momentum indicators are neutral: the Relative Strength Index (RSI) is hovering near 50, in line with the consolidation phase, and the Moving Average Convergence Divergence (MACD) is flat around the zero line, indicating a lack of directional commitment as traders await the Fed.
