This may be gold's last chance for the bulls to reclaim this trend and shoot for a new higher high. Tomorrow is a big day for gold due to the FOMC decision. Let me break down why this matters so much, from both a technical and fundamental perspective.
The Technical Setup
From a technical perspective, gold is currently sitting at a critical level where it looks poised to bounce. Price is trading around a key liquidity level I have outlined as the 0.786 Fibonacci from the range high in January to the recent range low in June. I have also extended this back to October 2025 to show many of the key tests gold has seen at this level (yellow circles). Price continues to respect this level with daily candle closes.
Price also printed a daily doji today, showing that within this downtrend, indecision is building and a reversal could be forming. In addition to that, bulls have been steadily defending the 50 moving average (green MA), with both yesterday's and today's lows holding above it. Because of all this, there are a number of technical signals beginning to suggest a low is forming here for gold, and another push to the upside could follow.
The Fundamental Setup
Tomorrow's FOMC decision carries the real weight. Markets are currently pricing in an 86% to 90% probability of a 25 basis point hike, raising the federal funds rate from 3.75% to 4%.
Traditionally, a rate hike is bearish for gold, since higher real yields raise the opportunity cost of holding a non-yielding asset. According to J.P. Morgan's own research, each single basis point increase in the 10-year real yield since late February 2026 has reduced gold prices by roughly $20 per ounce.
Major bank targets still sit above today's price regardless of tomorrow's outcome. Goldman Sachs holds a 2026 year end target of $4,900, JPMorgan sits at $4,500 for Q4, Bank of America's average target is $4,360, and HSBC's average sits at $4,560. These targets reflect a view that any near-term hike-driven weakness is more likely to be short-lived.
That said, if Warsh delivers a notably hawkish tone alongside the hike, real yields could move sharply higher and pressure gold meaningfully in the near term, which is the primary risk to be aware of heading into tomorrow.
However the outcome that would align with the technicals would come down to what is actually driving the move higher in yields right now. If tomorrow's inflation and yield backdrop is being driven primarily by rising inflation expectations, fueled by oil's recent breakout and hot CPI and PPI prints, rather than genuine strength in real growth, then real yields could stay flat or even fall even as the Fed hikes and the nominal 10-year holds above 5%. In that scenario, gold's traditional headwind from the rate decision itself would be far weaker than the headline hike suggests.
There is also a scenario where the hike itself is confirmed exactly as priced, but Warsh's tone during the press conference comes across as more balanced or data-dependent than markets expect. Since a hike at these odds is already almost fully priced in, the market's reaction is likely to hinge more on the forward guidance and press conference than the decision itself. A statement that leaves the door open to a pause afterward, paired with any acknowledgment that inflation risks are being driven by supply-side pressures like oil rather than demand overheating, could ease the pressure on real yields and give gold the room to rally on relief alone.
Others Factors
There are a couple of other things worth keeping in mind. First, gold is still in a bear market, so until proven otherwise, any push to the upside is still likely to fall short of the last high. I outlined this in my last gold post when price topped at $4,700. For more context, please review that idea here:
Once price is able to make a genuine higher high, it will be safer to start running through more bullish scenarios and what could come next for gold's trend from a momentum perspective.
Keep that in mind, but given the current structure forming, some form of bounce in line with tomorrow's FOMC decision looks likely. No matter what significant volatility is expected.
The Technical Setup
From a technical perspective, gold is currently sitting at a critical level where it looks poised to bounce. Price is trading around a key liquidity level I have outlined as the 0.786 Fibonacci from the range high in January to the recent range low in June. I have also extended this back to October 2025 to show many of the key tests gold has seen at this level (yellow circles). Price continues to respect this level with daily candle closes.
Price also printed a daily doji today, showing that within this downtrend, indecision is building and a reversal could be forming. In addition to that, bulls have been steadily defending the 50 moving average (green MA), with both yesterday's and today's lows holding above it. Because of all this, there are a number of technical signals beginning to suggest a low is forming here for gold, and another push to the upside could follow.
The Fundamental Setup
Tomorrow's FOMC decision carries the real weight. Markets are currently pricing in an 86% to 90% probability of a 25 basis point hike, raising the federal funds rate from 3.75% to 4%.
Traditionally, a rate hike is bearish for gold, since higher real yields raise the opportunity cost of holding a non-yielding asset. According to J.P. Morgan's own research, each single basis point increase in the 10-year real yield since late February 2026 has reduced gold prices by roughly $20 per ounce.
Major bank targets still sit above today's price regardless of tomorrow's outcome. Goldman Sachs holds a 2026 year end target of $4,900, JPMorgan sits at $4,500 for Q4, Bank of America's average target is $4,360, and HSBC's average sits at $4,560. These targets reflect a view that any near-term hike-driven weakness is more likely to be short-lived.
That said, if Warsh delivers a notably hawkish tone alongside the hike, real yields could move sharply higher and pressure gold meaningfully in the near term, which is the primary risk to be aware of heading into tomorrow.
However the outcome that would align with the technicals would come down to what is actually driving the move higher in yields right now. If tomorrow's inflation and yield backdrop is being driven primarily by rising inflation expectations, fueled by oil's recent breakout and hot CPI and PPI prints, rather than genuine strength in real growth, then real yields could stay flat or even fall even as the Fed hikes and the nominal 10-year holds above 5%. In that scenario, gold's traditional headwind from the rate decision itself would be far weaker than the headline hike suggests.
There is also a scenario where the hike itself is confirmed exactly as priced, but Warsh's tone during the press conference comes across as more balanced or data-dependent than markets expect. Since a hike at these odds is already almost fully priced in, the market's reaction is likely to hinge more on the forward guidance and press conference than the decision itself. A statement that leaves the door open to a pause afterward, paired with any acknowledgment that inflation risks are being driven by supply-side pressures like oil rather than demand overheating, could ease the pressure on real yields and give gold the room to rally on relief alone.
Others Factors
There are a couple of other things worth keeping in mind. First, gold is still in a bear market, so until proven otherwise, any push to the upside is still likely to fall short of the last high. I outlined this in my last gold post when price topped at $4,700. For more context, please review that idea here:
Once price is able to make a genuine higher high, it will be safer to start running through more bullish scenarios and what could come next for gold's trend from a momentum perspective.
Keep that in mind, but given the current structure forming, some form of bounce in line with tomorrow's FOMC decision looks likely. No matter what significant volatility is expected.
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Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.