Did the Fed just crash the markets? Gold tumbles as Warsh signals higher for longer. These are the key levels to watch

Key takeaways

• The Fed held rates at 3.50% to 3.75%, but its projections turned sharply hawkish: the median year-end dot rose to 3.8%, and nine of 18 policymakers now expect at least one hike in 2026, up from none in March.
• In his first meeting as chair, Kevin Warsh removed the statement’s easing bias, declined to submit his own dot, and announced five task forces to overhaul Fed operations.
• Markets moved risk-off: the S&P 500 fell 1.21%, the 2-year Treasury yield jumped around 16 basis points, and the dollar posted its best day in almost a year.
• Gold fell more than 2%, caught between higher-for-longer rates, a stronger dollar, and a fading Iran safe-haven bid ahead of Friday’s peace-deal signing.
• Markets now price no rate cuts in 2026, with some traders eyeing a possible hike as early as October.

A hawkish surprise from Warsh’s first Fed meeting

The US Federal Reserve (Fed) left interest rates unchanged at 3.50% to 3.75% on Wednesday, its fourth hold in a row and exactly what markets had priced. The decision itself wasn’t the story. The projections were.

In Kevin Warsh’s first meeting as Fed chair, the updated forecasts showed the median year-end rate climbing to 3.8%, up from 3.4% in March, and nine of the 18 policymakers who submitted projections now expect at least one rate hike before the end of the year. As recently as March, none did. The committee also stripped the easing bias out of its statement, removing the language that had pointed towards future cuts.

In short, the Fed told markets to stop waiting for rate cuts. For an asset that had been leaning on the prospect of easing, that’s a problem.

Warsh signals a different kind of Fed

Warsh used his debut press conference to stress price stability above all else, noting the Fed has missed its 2% inflation target for five years and committing to fix that. He declined to submit his own rate projection, calling it unhelpful for the conduct of policy, consistent with his long-held scepticism of the dot plot.

He also laid out plans for a quieter, more disciplined Fed: a shorter, “curt” policy statement, fewer and briefer press conferences, and five task forces to review the central bank’s operations, including its communications and balance sheet. The message was less about this month’s decision and more about a change in how the Fed operates.

Markets turned risk-off

The reaction was swift. Equities sold off, with the S&P 500 closing down 1.21% and the tech-heavy Nasdaq Composite off 1.34%. The two-year Treasury yield, which tracks rate expectations, jumped around 16 basis points to its highest in more than a year, and the US dollar posted close to a 1% gain, its strongest day in almost a year.

Why this matters for gold

Gold tends to struggle when real yields rise and the dollar strengthens, since it pays no yield of its own and is priced in dollars. Both moved against it at once, and gold fell more than 2% on the session.

The timing adds to the pressure. With the US-Iran peace deal due to be signed in Switzerland on Friday 19 June and oil sliding back below $80, the safe-haven premium that had supported gold through the conflict appears to be unwinding, extending the risk-on move across markets we covered earlier this week. The same easing of inflation fears that markets are welcoming also removes one of gold’s recent tailwinds.

Gold daily chart: a potential death cross comes into view

On the daily timeframe, gold is trading near 4,300 and testing the area around 4,350. Reclaiming that level could open the door to the next zone of interest higher up.

The bigger story sits in the moving averages. The 50-day simple moving average (SMA) has been grinding lower while the 200-day SMA flattens, and the two are now converging. If the 50-day crosses below the 200-day, that completes a death cross, a classic bearish signal gold has not printed since November 2023. Those two averages sit close together around the 4,500 mark, which also lines up with overhead supply.

That makes the 4,500 area the level to watch on the upside. A clear break above 4,350, followed by a push into that zone, could put gold back among its major moving averages and start to challenge the bearish setup. Until then, the structure leans lower, with the potential death cross adding weight to the cautious case.

Gold 4H chart: rejection from the short RLZ

On the 4-hour timeframe, gold remains in a clear downtrend. Price pushed up into a local reload zone, the resistance it had recently broken down from, and was firmly rejected, then sold off sharply after the Fed decision and Warsh’s press conference. That sharp move also filled the weekend gap.

That keeps 4,350 as the pivot. It is the higher-timeframe resistance gold needs to reclaim, and so far it has capped the recovery.

If price continues lower, the next major support on the higher timeframes sits at the 4,000 area. If instead gold can recover and hold above 4,350, it could open the path towards the 4,500 to 4,550 resistance band in the mid-term, where the daily moving averages and overhead supply converge.

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