• Gold price remains steady above $4,200, lacking directional bias ahead of FOMC.
• The US dollar remains depressed as yields remain lower in the wake of a rate cut.
• The Broader gold outlook, moving into 2026, poses a downside risk.

Gold price trades in a narrow range on Wednesday, struggling to extend the last session’s rebound from $4,170. The metal stayed near weekly highs through the Asian session, but traders showed little interest in fresh positioning ahead of a high-risk Fed event due later today.

The Fed is set to release the Summary of Economic Projections and dot plot to provide crucial guidance on the 2026 easing path. The gold markets remain in a tight range, awaiting clarity before committing to the directional move.

The US dollar remains depressed near October lows while US yields struggled to gain modestly despite firm data. Fed officials have repeatedly signaled that the cooling labor markets and slowing growth should gradually tame inflation, keeping the path open for further easing in 2026. Even Tuesday’s upbeat JOLTS report showed the figures rising to 7.658 million in September and 7.67 million in October, failing to gather buying traction.

On the other hand, the safe-haven flows acting as a secondary variable continue to consistently support the gold prices. Geopolitical tensions surrounding the Russia-Ukraine conflict maintain a floor under gold.

Other than the near-term risk event, the broader strategic demand for gold is shifting, moving into the New Year. The World Gold Council released the gold outlook 2026, laying out different scenarios ranging from 30% rally to a potential 20% crash. After a yearly surge of 61%, posting more than 50 all-time highs, the question of sustaining this rally now remains a point of attention for the investors.

The bearish reflation return scenario shows the Trump era’s fiscal expansion that could drive stronger growth, higher yields, and a stronger dollar. This poses a downside risk for the gold, projecting a downside to $3,300. Rising opportunity costs, ETF flows, and rotation into risk assets can be the key drivers behind such a decline.
 

Gold Key Events Ahead:

Today’s FOMC rate decision remains focal for traders, while Employment Cost Index data is also important to watch.

Gold Price Technical Outlook: Choppy Near 20-MA
 

(Click on image to enlarge)

Gold 4-hour chart
 

Gold price stays choppy around the 20-period MA near $4,205, while the RSI remains flat near the 50.0 area. This suggests a continued consolidation in the wake of a market catalyst.

A sharp upside could let the price test $4,250 area ahead of $4,300, while a bearish push could lead the price towards weekly lows of $4,170 ahead of $4,100.

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