I. Core driver analysis
In the early hours today Beijing time, the Fed announced a 25 basis point rate cut as expected, lowering the federal funds target range to 4.00%–4.25%. This is the Fed's first cut since December 2024.
The cut theoretically lowers the opportunity cost of holding gold, which is potentially positive for gold prices. As interest rates fall, income-bearing assets become less attractive, so gold — a non-yielding asset — may attract inflows.
Policymakers predict another 50 bp of cuts in 2025, and 25 bp cuts in both 2026 and 2027. This forward guidance suggests a continued easing path, and a long-term low-rate environment is broadly supportive for gold.
At the press conference, Powell said the policy focus is shifting from inflation to employment, suggesting possible further support for growth. He also stressed the cut was a risk-management decision and there is no need to move quickly on rates; this cautious tone may limit near-term upside for gold.
Overall, the decision has mixed effects on gold. Long-term easing expectations are supportive, but a cautious pace of cuts could cause short-term volatility. With global economic uncertainty and geopolitical risks, gold's safe-haven demand remains solid.
II. Gold technical setup strategy
Gold dipped to a low of 3633.96 in the Asian session and then rebounded. It is now around 3655.50. On the 4-hour chart the two moving averages are in a bullish alignment, increasing the probability of further upside.
Trading suggestion:
Go long after a 4-hour close above 3668.00
Entry: around 3668.00
Stop loss: below 3624.00
Target: around 3740.00
III. Silver technical setup strategy
Silver fell first and then rose in the Asian session, now around 41.700. On the 4-hour chart the two moving averages also show a bullish alignment, suggesting higher odds of a rally.
Trading suggestion:
Go long after a 4-hour close above 42.250
Entry: around 42.250
Stop loss: below 41.070
Target: around 43.800
Risk warning: Trading markets carry unpredictable risks, including but not limited to loss of principal. This analysis is for reference only and does not constitute direct investment advice. Investors should make independent judgments and decisions based on their own risk tolerance.