•                     Gold price holds the previous rebound below $2,770 on Fed day.  

•                     The US Dollar trades subdued amid risk recovery, boosting Gold price.

•                     The daily technical setup for gold prices remains bullish, but the Fed could spoil its party.

In Wednesday's Asian trading, the gold price is maintaining its recovery gains at approximately $2,770. In anticipation of the critical Federal Reserve (Fed) policy announcement scheduled for later this Wednesday, gold purchasers are trading with caution.

The next trading impetus for the gold price is anticipated to be the Federal Reserve's verdict.
Markets are in a state of anticipation, anticipating that the Federal Reserve will suspend the interest rate reduction and offer indications regarding its subsequent policy action. According to LSEG data, markets are anticipating nearly 50 basis points (bps) of reductions this year, or two 25 bp reductions commencing in June.

Nevertheless, the press conference of Fed Chairman Jerome Powell will be closely examined to determine the timing and extent of additional rate reductions during the second term of US President Donald Trump.. Trump's immigration and trade policies are viewed as inflationary, as they have the potential to encourage the Federal Reserve to maintain higher rates for an extended period, which could have a negative impact on the price of gold, which is not interest-bearing.

In the event that Powell and his colleagues express their confidence in the path of disinflation and acknowledge weakening labour market conditions, markets could interpret this as a dovish hold, increasing bets on future rate cuts and elevating the gold price to new record highs.
In the interim, the gold price will continue to receive support from the stabilising risk sentiment, broadly subdued US Dollar, and holiday-thinned conditions. The Lunar New Year holiday break also resulted in the closure of the markets in China, Singapore, and Hong Kong.

The markets have recovered from the global AI sell-off headed by DeepSeek, which was triggered by China's low-cost artificial intelligence (AI) model. The focus is now on the earnings results of the US tech titans, Microsoft, Meta, and Tesla, which are scheduled to be released in the late American session on Wednesday.

A renewed global tech sell-off may be imminent if earnings disappoint and budget forecasts fail to convince investors, resulting in markets transitioning to a "sell-everything" stance. In this scenario, the gold price could either reverse any reaction to the Fed policy announcements or extend the downside on a potential hawkish hold.

Technical analysis of the gold price: Chart of the day

The daily time frame's technical configuration continues to favour the Gold price. Consequently, it is probable that the brilliant metal will be purchased during periods of weakness.
Gold buyers remain optimistic as the 14-day Relative Strength Index (RSI) remains comfortably above the midline, presently at approximately 65.
The 50-day SMA closed above the 100-day SMA last Thursday, thereby verifying a Bull Cross and adding credence to the bullish potential.

In order to establish a new upward trend, the gold price must close a daily candlestick above the symmetrical triangle target of $2,785 or the record high of $2,790.

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