Gold pauses below its new record high as markets await the Fed rate decision

Gold prices edged lower during European trading on Tuesday as bulls took a breather after a strong three-day rally that pushed the metal to a new record high.

Overbought conditions on the daily charts contributed to some profit-taking, but any dips are expected to be shallow, with traders positioning for a fresh push higher ahead of the Fed’s rate decision, which concludes on Wednesday.

Markets are likely to remain subdued as they await the Fed’s verdict. Growing expectations that U.S. policymakers may opt for a more aggressive 50 basis point rate cut are fueling bullish sentiment, with shallow dips presenting opportunities for new long positions, potentially targeting the psychological $2600 level and higher.

Initial support lies in the $2560/55 area, protecting the more significant $2533/31 zone (10-day moving average and former all-time high), which is expected to contain any deeper pullback.

Res: 2589; 2600; 2614; 2628
Sup: 2561; 2556; 2531; 2520