Gold Steadies at $3,260 as Traders Eye Fed Meeting and Key Resistance Level

Trading data from global markets shows gold prices stabilizing around $3,260 on Monday morning as investors await this week’s Federal Reserve meeting. The precious metal recovered slightly from its worst weekly decline in over two months.

Gold spot prices edged up 0.2% after retreating significantly from April’s record high of $3,500. Technical indicators suggest the metal faces critical resistance at $3,275, which traders watch closely for potential breakout signals.

Gold June futures on India’s MCX opened higher at Rs 93,271 per 10 grams, showing an increase of 0.68%. This modest recovery arrives as the dollar index weakens by 0.3%, making gold more attractive to holders of other currencies.

Silver futures also posted slight gains, trading at Rs 94,145 per kilogram, up 0.09%. Market attention focuses on the Federal Reserve meeting scheduled for May 6-7.

Most analysts expect rates to remain unchanged despite speculation about potential cuts later this year. Gold typically performs well in low-interest-rate environments because it carries no yield.

Current market pricing suggests expectations of 80 basis points in rate cuts throughout 2025. Recent ETF data reveals significant investor interest in gold.

Gold ETF Inflows Surge Amid Geopolitical Uncertainty

The first quarter of 2025 saw ETF inflows between 155-226.5 metric tons, marking the largest quarterly increase since Q1 2022. Total ETF holdings reached 3,445.3 tons by late March, approaching levels not seen since May 2023.

However, holdings remain approximately 20% below their October 2020 peak. Technical analysts point to important levels that could determine gold‘s near-term direction.

The metal holds above its 21-day Simple Moving Average at $3,242, which provides key support. Resistance levels include $3,275, $3,294, and $3,319, with significant support at $3,247 and $3,202.

Recent price action follows easing US-China trade tensions that previously reduced safe-haven demand. President Trump’s statement that he won’t remove Fed Chair Powell before 2026 has provided some market stability.

The continuing geopolitical tensions and economic uncertainty maintain underlying support for gold prices. Market sentiment remains divided. Many traders believe the $3,275 level holds the key to further advances.

A decisive break above this threshold could target the recent high of $3,319. Conversely, rejection at current levels might send prices back toward $3,230 support.

The MACD indicator shows early signs of turning upward, potentially signaling renewed buying interest. Volume confirmation becomes crucial near these technical junctures to filter out false breakouts.

Gold’s overall trajectory appears constructive as long as prices maintain above the pivotal $3,200 psychological level.

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