Gold Price Prediction Today: XAU/USD Surges Past $4,275 Following Fed's Policy Shift

Precious metals reach seven-week highs as monetary easing reshapes market dynamics. The gold price prediction for today points to sustained momentum, with XAU/USD establishing fresh resistance levels around $4,275 during early Asian trading on Friday. This rally reflects a significant shift in the interest rate environment following the Federal Reserve’s recent policy decision.

Fed Rate Cut Pressures the US Dollar

The central bank’s decision to reduce rates by 25 basis points (bps) in a closely divided vote on Wednesday has reshaped currency dynamics. The new Fed funds rate now sits within a 3.50% to 3.75% range—marking its lowest position in three years. This monetary easing typically reduces the appeal of dollar-denominated assets, creating a headwind for the Greenback and providing tailwinds for gold price movements.

Importantly, Fed officials have indicated a cautious stance toward additional cuts. Market participants are now assigning nearly a 78% probability that the central bank will maintain rates at its next meeting, compared to 70% odds prior to the announcement, according to CME FedWatch data. This hawkish pivot suggests the easing cycle may be nearing completion.

Labor Market Weakness Amplifies Commodity Support

Disappointing employment figures released Thursday morning added another layer of support to precious metals. New jobless claims surged by the largest weekly increase in over four years, according to Department of Labor statistics. This disappointing labor market data weighed on the US Dollar’s appeal while reinforcing the case for gold as an alternative store of value.

The combination of softer employment trends and elevated inflation readings—which policymakers continue to monitor—has created a supportive backdrop for non-yielding assets like bullion.

Geopolitical Uncertainty Could Shift the Narrative

Ukrainian President Volodymyr Zelensky signaled potential progress on peace negotiations Thursday, revealing that Kyiv has engaged with senior American officials regarding security arrangements. His team presented Washington with a comprehensive 20-point proposal aimed at resolving the Russia-Ukraine conflict.

Should diplomatic efforts gain traction, traditional safe-haven demand for gold could face downward pressure as investors rotate into riskier assets. This geopolitical variable remains a key factor in gold price predictions, adding complexity to the technical and fundamental outlook.

The gold price prediction today reflects a delicate balance between supportive monetary conditions and nascent peace discussions that could redistribute portfolio allocations in the weeks ahead.