Gold markets are responding to the recent Federal Reserve (Fed) decision, with European traders stepping back from their overnight actions. Currently, investors are holding their positions and waiting for more U.S. economic data, such as the weekly initial jobless claims. Earlier, gold prices fell to $3,634, briefly dropping below the 100 and 200-hour moving averages for the first time in four weeks. However, this decline seems to be just a temporary dip, as prices have climbed back above these averages, showing buyers are back in control.

The Fed Decision and Gold Market Reaction

The Fed’s recent decision wasn’t very dovish but fits well with what the market expected. Unless upcoming U.S. economic reports suggest otherwise, the broader outlook remains steady. Once the Fed starts easing monetary policy, it often keeps going in that direction. This could push gold prices higher, with estimates even suggesting a spike to $4,000. A small price pullback could happen before the stronger months of December and January. After the Fed’s decision on September 17, gold went below its key near-term moving averages, but buyers quickly reversed that trend. This price movement indicates that the market views the dip as a chance to buy, not a sign of a changing trend. The focus now is on how prices react to today’s U.S. weekly jobless claims data. The overall picture remains unchanged since the Fed’s easing policy aligns with recent economic trends. The last Non-Farm Payrolls report for August 2025 noted a slowdown in job growth to 155,000, reinforcing the need for a more supportive monetary policy. This environment should continue to benefit gold, which tends to do well when interest rates are low.

Market Strategies and Seasonal Trends

Remember, when the Fed starts easing, it often continues for a while. Looking back at the cycle that began in mid-2019, the Fed cut rates three times in a row, significantly boosting gold prices over the next year. History indicates this current easing cycle still has room to grow. With many analysts targeting $4,000, traders might consider buying call options that expire in December 2025 or January 2026 to take advantage of this anticipated rise. An alternative strategy could be selling out-of-the-money put options below the recent low of $3,634, allowing traders to collect premiums while betting that solid support will hold during any dips. However, it’s wise to prepare for a possible short-term pullback before the market enters its stronger seasonal phase. A smart move would be to buy some cheaper, shorter-dated put options with October or November expirations to guard against unexpected price moves. This creates a safety net for long positions without sacrificing too much potential upside. Historically, the seasonal trend for gold is strong in December and January, with data from the last 15 years showing positive average returns during this period. Therefore, any market weakness in the coming weeks could be a chance to strategize. Traders might see dips towards the mid-$3,600s as a final opportunity to build positions before this busy season. Create your live VT Markets account and start trading now.

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