Gold Price Holds Steady Ahead of Key Central Bank Announcements
Following last week’s decision by the European Central Bank (ECB) to leave interest rates unchanged, market attention now shifts to a series of major monetary policy updates. This week, traders will closely watch announcements from the US Federal Reserve, the Bank of England, the Bank of Japan, as well as central banks in Canada and Asia.
On the XAU/USD chart, gold has stabilised later than hitting fresh record highs, with investors largely adopting a wait-and-view approach. The ADX indicator is pointing lower, signalling a decline in directional momentum.
Fundamental Drivers Supporting Gold Prices
Markets are pricing in with near certainty that the Federal Reserve will cut rates by 25 basis points this week. Expectations of further easing in 2026, driven by signs of labour market softness, reinforce the bullish case for gold. Lower interest rates reduce the relative appeal of US Treasuries, making non-yielding assets such as gold more attractive.
Additional bullish catalysts include:
- Continued fragileness in the US dollar.
- Heightened geopolitical risks.
- Political pressure on the Federal Reserve, including Donald Trump’s recent attempt to dismiss Governor Lisa Cook.
- Sustained central bank demand for physical gold.
That said, profit-taking could temporarily cap upside momentum. Nevertheless, prices remain near historic levels.
Technical Outlook for XAU/USD
In our recent analysis, we highlighted . Since then, price action has consolidated within the $3,610–$3,660 range.
This confirms that the median line of the broader ascending channel is acting as resistance. Furthermore, the steep short-term upward channel (orange lines) has now been broken.
Potential Scenarios
- Bullish case: Resistance at $3,510 and $3,575 has already been broken and successfully retested, signalling strong demand.
- Bearish case: The long upper wick at the recent all-time high indicates aggressive tradeing pressure. A decisive break below the $3,575 support and the orange dotted trendline could trigger further downside.
Ultimately, gold’s next major move may hinge on this week’s central bank decisions. Traders should prepare for elevated volatility in XAU/USD.
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