As the market eyes tonight’s FOMC decision, volatility in Gold (XAU/USD) is expected to spike. Traders are pricing in a 97% probability of a 25 bps rate cut, from 4.00% to 3.75%, making the Fed’s tone a key determinant for the USD and Gold direction.
1️⃣ Fundamental Outlook
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Rate Cut / Dovish Tone: Likely to weaken the USD, supporting a bullish move in Gold.
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No Cut / Hawkish Tone: Strengthens USD, which may trigger a Gold correction.
Recent data shows softer inflation and slowing job growth, tipping the scales toward a dovish outcome. This aligns with a short-term bullish bias for Gold.
2️⃣ Technical Overview (H1–H4)
Gold is currently in a descending channel—a short-term correction within a larger bullish structure. Key levels to watch:
| Type |
Price |
Comment |
| Resistance |
$4,078–$4,100 |
Channel top & supply zone |
| Intraday Resistance |
$4,050 |
Potential liquidity grab area |
| Support |
$3,947 |
Intraday demand zone |
| Major Support |
$3,874–$3,878 |
Monthly SMC demand block |
| Liquidity Zone |
$4,005 |
Equal highs area pre-FOMC |
The monthly support at $3,874–$3,878 has been strongly defended, indicating institutional buying interest.
3️⃣ Price Action & SMC Bias
From a Smart Money Concepts (SMC) perspective:
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A sweep below $3,880 created a strong reversal block, signaling accumulation by institutions.
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The market is now in a reaccumulation phase, targeting premium levels for liquidity grabs before the FOMC.
Order Blocks to Watch:
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Bullish OB: $3,875–$3,900
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Bearish OB: $4,078–$4,100
Price may test above $4,050 to collect stop orders, then react sharply based on the FOMC outcome.
4️⃣ Trading Plan (Scenario-Based)
🟢 Bullish Case (Rate Cut / Dovish Fed):
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Entry: Break & close above $4,050
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SL: Below $4,020
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TP1: $4,078 | TP2: $4,135 | TP3: $4,249
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SMC View: Break above channel → imbalance fill toward $4,135–$4,250
🔴 Bearish Case (No Cut / Hawkish Fed):
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Entry: Rejection from $4,050–$4,078 zone
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SL: Above $4,110
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TP1: $3,947 | TP2: $3,874 | TP3: $3,820
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SMC View: Premium zone manipulation → continuation of bearish channel correction
5️⃣ Strategic Summary
| Bias |
Setup |
Action |
| Short-term |
Bullish if rate cut confirmed |
Wait for breakout above $4,050 |
| Medium-term |
Consolidation until FOMC volatility clears |
Trade reaction, not anticipation |
| Long-term |
Still bullish as long as $3,874 holds |
Potential expansion toward $4,249+ in November |
Conclusion:
Gold traders should monitor the $4,050 breakout zone for clues. A dovish Fed could propel Gold toward $4,249, while a hawkish surprise may see it revisit $3,874. Reacting to price action post-FOMC is key—anticipation could be risky.
By Md Golam Rabbani
