Gold Price Rallies to Fresh Record High amid Limited Response to Fed

Gold Price Outlook: XAU/USD

The price of gold trades to a fresh record high ($2799) following the limited reaction to the Federal Reserve interest rate decision, with the recent advance in bullish pushing the Relative Strength Index (RSI) back towards overbought territory.

Gold Price Rallies to Fresh Record High amid Limited Response to Fed

The price of gold extends the recent series of higher highs and lows to clear the 2024 high ($2790), and a move above 70 in the RSI is likely to be accompanied by a further rise in bullion like the price action from last year.

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In turn, gold may continue to carve a bullish price series even though the Federal Open Market Committee (FOMC) keeps US interest rates on hold at its first meeting for 2025, and the threat of a policy error by major central banks may keep bullion afloat as it offers as an alternative to fiat currencies.

With that said, the price of gold may trade to fresh record highs over the remainder of the month as it breaks out of the range bound price action from earlier this week, but the RSI may show the bullish momentum abating if it struggles to push into overbought territory.

XAU/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView

• The price of gold clears the 2024 high ($2790) as it carves a series of higher highs and lows, with a close above $2790 (50% Fibonacci extension) opening up $2850 (61.8% Fibonacci extension).
• Next area of interest comes in around $2940 (78.6% Fibonacci extension), but the price of gold snap the bullish series should it struggle to hold above $2790 (50% Fibonacci extension).
• Need a break/close below $2730 (100% Fibonacci extension) to bring the $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) zone on the radar, with the next area of interest coming in around the monthly high ($2764).

Additional Market Outlooks

EUR/USD Struggles Ahead of ECB as Fed Keeps US Interest Rate on Hold

USD/CAD Unfazed by BoC Rate-Cut Ahead of Fed Decision

AUD/USD Susceptible to Negative Slope in 50-Day SMA

USD/JPY Outlook Hinges on Federal Reserve Rate Decision

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong