Chat with us, powered by LiveChat

Choose country & language:

Close Icon

Gold rally halted ahead of Fed policy meeting

Home >  Daily Market Digest >  Gold rally halted ahead of Fed policy meeting


Written by:
Myrsini Giannouli

31 January 2023
Share the article

Gold’s rally was halted on Monday. Gold traded with low volatility as markets await the Fed policy meeting on Wednesday. Gold prices retreated from last week’s 9-month high of $1,949 per ounce, touching $1,920 per ounce on Monday. If gold prices continue to increase, resistance may be encountered near $1,950 per ounce, while if gold prices decline, support may be found near $1,896 per ounce.

Gold prices have been predominantly directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar edged higher on Monday, as markets weighed Fed rate hike odds and the dollar index climbed above 102.3. US Treasury yields also rose a little, with the US 10-year bond yielding approximately 3.55%.  

Increases in central banks’ interest rates put pressure on gold prices since assets yielding interest become a more appealing investment compared to gold as interest rates rise. The Fed monetary policy meeting this week on February 1st will likely affect gold prices considerably. Market odds are currently split between a 50-bp rate hike and a more moderate 25-bp rate hike this week. A potential Fed shift towards a more dovish policy will likely boost gold prices further. 

US inflation seems to be cooling, providing support for gold prices. Cooling price pressures may give the US Federal Reserve some leeway towards scaling back its interest rate increases, boosting gold prices. Gold prices surge as the Fed and other central banks start to scale back their aggressive rate hiking.

Gold has been in a bullish trend for the last couple of months, which is likely to continue if the Fed signals a pause in raising interest rates. Even though inflation rates remain high, signs of cooling price pressures have reduced rate hike expectations, providing support for gold prices. Gold prices are approaching overbought territory though, as they trade close to levels reached only after the crisis in Ukraine started last year.

XAUUSD 1hr chart


The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.


Written by:
Myrsini Giannouli

Share the article:

Latest news


Dollar supported by strong US treasury yields

Myrsini Giannouli 23 February 2024

Gold weighed down by strong treasury yields

Myrsini Giannouli 23 February 2024

Oil prices surge as US stockpiles shrink

Myrsini Giannouli 23 February 2024

Bitcoin struggles to overcome $52K barrier

Myrsini Giannouli 23 February 2024
Why TopFX
13+ years

industry presence
as a Liquidity Provider

from 0.0 pips

and reliable execution


client funds


customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!


The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.

If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.

Don't show this message again

Cookies on TopFX

The TopFX website uses cookies to optimise user experience.

These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.

Manage Preferences

You can customize your selection of which cookies you want to accept.

  • Essential

    These cookies are necessary for the website to function correctly and cannot be switched off.

  • Functional

    Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.

  • Marketing

    These cookies are used to track visitors across our websites and show you more relevant ads. Marketing cookies also include third-party cookies from partners. For more information relating to data protection & collection please view our Privacy Policy and Cookie Disclosure.