Market review

Spot gold jumped quickly to a record high after the Federal Reserve cut rates by 25 basis points. It is currently trading around $3,665. The rate cut lowers the opportunity cost of holding gold and makes gold more attractive in uncertain times.

Technical analysis

- On the 1-hour chart, the MACD lines are above the zero line, but the fast line looks likely to cross below the slow line, indicating a possible weakening of short-term upward momentum and a technical pullback.

- The RSI is hovering near 50, showing a temporary balance between buyers and sellers but slightly tilting toward weakness.

- Despite short-term signals of a correction, the overall technical structure remains bullish.

Drivers

- Minneapolis Fed President Kashkari said employment data supports this rate cut and hinted at possible further cuts over the next two meetings.

- The Fed's dot plot implies there could be two more cuts this year, providing ongoing monetary support for gold.

- Expectation of continued easing should keep flows into gold, though short-term overbought conditions may need to be digested.

Trading strategy (reference)

Spot gold

- Buy opportunity: Buy on a pullback to 3,650 if it holds. Target 3,670.

Spot silver

- Buy opportunity: Buy on a pullback to 42.500 if it holds. Target 42.800.

Risk warning: Trading markets carry unpredictable risks, including loss of principal. This analysis is for reference only and does not constitute direct investment advice. Investors should make independent decisions based on their own risk tolerance.