Gold posted notable moves last week following the Fed’s decision of a 25-basis-point rate cut, coupled with a more cautious stance going forward, hinting at only two additional cuts in 2025 amid renewed inflation fears.
This decision prompted the yellow metal to test the resistance range near $2,600 level before finding support and rebounding toward $2,620.
These developments come against a backdrop of market concerns over the pace of inflation, and expansionary fiscal policy outlook – factors that have lent gold solid support. The precious metal is expected to remain within a comfortable sideways channel between $2,620 and $2,660 during the holiday period, aided by seasonally lower trading volumes.
The aforementioned levels will be crucial for short-term price action. Gold could see further upside if inflationary worries intensify later on, or if the Fed signals further shift in its rate path.
