Gold sold off toward its critical support level after the Federal Reserve's hawkish rate hike, then held and rebounded — a setup that still needs a break above resistance to confirm a reversal. A separate hourly chart shows a similar recovery pattern testing a bull flag toward higher targets.
Gold dropped to 4,234.68, just above its critical 4,230.70 support level, after the Federal Reserve's hawkish rate decision. Rather than breaking down, the metal held the line and rallied in the following session, closing at 4,330.75 for a 1.55% gain.
Fed hike deepens the hawkish repricing
The FOMC unanimously raised its target range by 25 basis points to 3.75%-4.00%. Sixteen of eighteen officials projected at least one more hike in 2026, lifting the median year-end rate to 4.1%. The 2027 outlook was more divided, with eight officials favoring another increase, six expecting no change and four projecting cuts.
Markets moved in step with that hawkish read elsewhere: the Dollar Index completed a double bottom on the same decision. The 2-year Treasury yield surged as well. Gold absorbed the same repricing but stopped short of confirming it, as sellers pushed the metal toward the exact support needed to extend the decline without breaking it.
Four-hour chart flags a bullish divergence
Price made a marginal new low at 4,234.68 while the MACD formed a higher trough, recovering to -10.293 above its -15.232 signal line — a bullish divergence on the four-hour chart. The daily MACD remains below its own signal line and does not yet confirm the shift.
A firm break above 4,368.20 would also clear gold's daily 55 EMA near 4,342.06, opening the path toward 4,510.90 and then the 4,697.07 high. A break back below 4,230.70 would invalidate the setup and expose the 3,942.43 low.
Hourly chart shows a possible bear trap
A separate XAUUSD hourly analysis shows gold recovering after dipping below about $4,282, with price moving back above the hourly 20-period EMA. InvestingLive's Itai Levitan reads the move as a possible bear trap that could develop into a bull flag, with $4,348 as a first partial-profit area and $4,430 as a broader upside target if the pattern breaks out. A sustained return below the hourly 20 EMA would weaken that bullish reading, Levitan noted.
Sources: ActionForex, InvestingLive
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