Fed Keeps Rates Unchanged at 5.25%-5.50%, Maintains Dovish Stance
Gold prices (XAU/USD) remained stable near $3,390 after the Federal Reserve left interest rates unchanged at 5.25%-5.50% in its June 18 meeting. While policymakers acknowledged solid economic growth, they also signaled two potential rate cuts in 2025, keeping gold supported despite sticky inflation forecasts.
Key Takeaways from the Fed Meeting
✔ Interest Rates Unchanged – Fed maintains 5.25%-5.50% range, as expected.
✔ Two Rate Cuts Expected in 2025 – 50 basis points (0.50%) of easing projected.
✔ Lower GDP Growth Forecast – Revised down from 1.7% to 1.4% for 2025.
✔ Higher Core PCE Inflation – Upward revision from 2.8% to 3.1%.
✔ Unemployment Rate Slightly Higher – Now projected at 4.5% (vs. 4.4% previously).
Gold’s Reaction: Minimal Losses as Market Digests Fed Outlook
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XAU/USD traded flat (-0.08%) near $3,390, showing resilience despite inflation concerns.
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Focus now shifts to Fed Chair Powell’s press conference for further guidance.
Gold Price Levels to Watch
✅ Resistance:
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$3,400 (psychological barrier)
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$3,452 (June 16 high)
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$3,500 (key upside target)
✅ Support:
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$3,350 (immediate floor)
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$3,301 (50-day SMA)
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$3,245 (May 29 low)
Why Gold Remains a Hedge Amid Fed Uncertainty
Despite higher core inflation projections, gold’s stability reflects:
🔹 Safe-haven demand amid economic uncertainty
🔹 Potential dollar weakness if Fed cuts materialize in 2025
🔹 Long-term inflation hedge as real rates stay restrictive
Market Outlook: Will Gold Break Higher?
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If Fed confirms a dovish pivot, gold could target $3,500+.
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If inflation stays stubborn, prices may consolidate near $3,300-$3,400.
