Gold (XAU/USD) Soars to Breach $3700/oz. FOMC Meeting Next, Will the Rally Continue?

Commodity

Summary:

Gold surged above \$3700/oz on Fed rate cut bets, weaker dollar, and safe-haven demand. Traders eye Wednesday’s FOMC decision: dovish signals could fuel a run toward \$3800, hawkish tone risks \$3600 pullback.

Gold prices soar to tap $3700/oz as Fed rate cut bets ramp up. The precious metal continues to benefit from the uncertainty around Fed policy moving forward beyond the September 17 meeting.

The expectations for a rate cut and a dovish Fed moving forward has led to US Dollar weakness and falling US Treasury yields which have aided Gold's rise. The US dollar is getting weaker, with its value falling against other major currencies.

This is because financial markets are now pricing in around 95% probability that the Federal Reserve will cut interest rates by 0.25% and expect a more dovish outlook moving forward.

At the same time, returns on US government bonds are also staying low. This makes assets like gold, which don't pay interest, more attractive to investors because they aren't giving up much in potential earnings by not holding bonds instead

The question for market participants right now is how much further can the gold rally go?

Fed Policy Holds the Key

On Wednesday, the much anticipated Federal Reserve decision will be the main focus for financial markets. It does appear as though a 25bps rate cut has largely been priced in and thus we have seen many analysts talk about the potential of a ‘buy the rumor, sell the fact’ reaction to the rate decision.

With that in mind, markets may be more focused on the dot plot and how the Fed sees the rate outlook moving forward. The calls by the Trump administration as well as a weakening labor market has seen markets price in more aggressive rate cuts over the next 12 months.

A dovish Fed outlook could fuel the Gold rally and push the precious metal toward the $3800/oz handle. A more hawkish outlook or no changes to the dot plot could see the Gold prices finally drop and pullback toward the $3600/oz handle.

Fed Independence Concerns Linger

The Fed meeting is holding its monetary policy meeting at a difficult time. US President Donald Trump is actively trying to influence their decisions, and there are legal challenges against the Fed's leadership which has led to concerns around Fed independence which is also aiding the Gold rally.

Leading up to the meeting, President Trump has been pressuring Fed Chair Jerome Powell on social media to make a bigger interest rate cut than what is expected. Trump believes that a more significant cut is overdue and would greatly help the housing market.

In a related development, a U.S. appeals court stopped an attempt by President Trump to remove Fed Governor Lisa Cook from her position, ruling that his reasons were not legally sufficient. This means Lisa Cook is expected to participate in Wednesday's important vote.

Additionally, Stephen Miran, a key economic advisor to President Trump, was narrowly confirmed by the Senate to join the Federal Reserve Board. Analysts believe that Miran might push for a larger interest rate cut than what most people expect, which keeps the question about how much political influence might affect the Fed's decisions.

Other Factors Supporting Gold Prices

Gold is receiving an extra boost from heightened global tensions, which are pushing investors toward safe-haven assets.

This increase in geopolitical risk is primarily driven by two major developments: an escalation of the conflict between Israel and Hamas, as Israel launched a significant ground offensive in Gaza City on Tuesday, and an intensification of drone and missile strikes by Ukraine on Russian refineries, which is disrupting Russia's energy infrastructure.

Economic Calendar

Technical Analysis - Gold (XAU/USD)

From a technical standpoint, Gold broke out of the bull flag pattern on a four-hour timeframe before rallying to its potential target around the $3700/oz handle.

We are seeing a pullback since then with the latest four hour candle closing as a hanging man, which hints at further downside.

Given the rally this week, we could see a bit of a pullback as some market participants may look to take profit ahead of the FOMC meeting.

The period-14 RSI is also in overbought territory. A break back below the 70 level on the RSI usually signals a shift in momentum and could lead to a short-term push lower.

However, we have seen similar attempts at a pullback since the backend of last week and each time buyers returned with conviction to print fresh highs.

Thus there is a possibility that this could continue heading into the US Fed rate decision.

Gold (XAU/USD) Four-Hour Chart, September 16, 2025

Source: marketpulse

Risk Warnings and Disclaimers

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Devin

Russia-Ukraine Conflict

The European Union has put its next round of sanctions against Russia on hold, with no new timeline for when the measures will move forward, according to a report by Politico citing EU officials.

Politico correspondent Sarah Wheaton writes Tuesday, "The next sanctions package against Russia — the 19th since Moscow began its war against Ukraine — is no longer expected to be presented on Wednesday, an EU diplomat and a national official told my colleague Camille Gijs."

"It’s fallen off the Coreper II agenda as U.S. President Donald Trump and the EU’s own pressure build on Slovakia and Hungary to cut their reliance on Russian oil," the report adds.

Via AP: EU Commission President Ursula von der Leyen and her deputy, Foreign Affairs High Representative Kaja Kallas

EU foreign policy chief Kaja Kallas had previously said the 19th sanctions package should be ready by the end of the month, which suggests that indeed the new Trump pressure is likely a major obstacle which explains the delay.

There's also been some behind the scenes wrangling over how far-reaching the punitive measures might be, especially on the question of visas for Russians.

Some EU member states are pushing for the new sanctions to include tougher, bloc-wide rules on visas for Russian citizens. As it stands, each country sets differing policies related to tourist visas, with several EU members blocking all Russian tourist visas outright - though countries like Spain and Slovakia recently reopened their visa centers in Moscow.

Some anti-Putin activists have admitted that a blanket EU ban would only harm everyday people, and the Kremlin would see itself justified in alleging 'Russophobic' policies out of Brussels.

Against the backdrop of the internal EU policy debate, over the weekend President Trump urged NATO members to stop buying Russian oil and pushed the idea of imposing steep tariffs, possibly up to 100%, on Chinese goods in order to pressure Beijing from supporting Moscow.

But the reality remains that especially Turkey, Slovakia, and Hungary are heavily reliant on Russian energy, and aren't going to agree to drastic measures which harm their own populations and economies.

The newest proposes sanctions would take aim at Russia's payment and credit card networks, cryptocurrency exchanges, as well as impose additional restrictions on its oil trade. In total it would target about half a dozen Russian banks and energy companies.

Below: Trump's latest to reporters:

"Zelensky is gonna have to make a deal."

Trump once again slams Europe for buying Russian oil: "You know, they talk, but they're gonna have to stop buying oil from Russia."

US Treasury Secretary Scott Bessent in a Meet the Press interview on Sunday said: "We are prepared to increase pressure on Russia, but we need our partners in Europe to follow."

Urging Europe to act more aggressively, he said, "We are talking about what the two, the EU and the U.S., do together. But we need our European partners to follow us."

Source: Zero Hedge

Risk Warnings and Disclaimers

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Adam

Economic

Why do rating agencies wait until Friday evening to update their ratings, when everyone (at least in Europe) has already left for the weekend?

The idea behind this schedule is to give the markets time to "digest the news" and thus avoid overly harsh reactions at the opening. This objective has been perfectly achieved in the case of France.

On Friday evening, Fitch announced that it had downgraded France's rating from AA- to A+. And this morning, the CAC 40 opened up around 0.5%, while the French 10-year bond is at the same level as Friday, at 3.5%.

Lagging indicator

Beyond the timing, the lack of reaction mainly reflects the fact that this decision merely confirms a situation that is known to everyone, namely deteriorating public finances and the difficulty of taking measures to address the issue, given political instability.

Rating agencies are somewhat of a lagging indicator, and the market has already "done the work" when a downgrade occurs.

This is evidenced by the interest rate spreads relative to other eurozone countries. In recent days, the yield on 10-year French bonds has exceeded that on 10-year Italian bonds, even though Italy's credit rating (BBB) is several notches below that of France.

Prior to this, France was already borrowing at higher rates than Spain (whose rating was upgraded to A+ at the same time as France's downgrade), Portugal, and Greece. Conclusion: the market no longer considers France to be an AA country.

Why has France's credit rating downgrade not provoked any reaction?_1

Loss of status?

After Fitch, which is often considered a frontrunner amongst the rating agencies, Moody's and S&P Global will reassess their ratings in October and November. A downgrade is therefore likely, but we should not expect any more reaction than there was to Fitch's downgrade.

Fundamentally, the problem remains the same for France: passing a budget that reduces the deficit in a parliament that is divided into three blocs.

Will Sébastien Lecornu succeed where Michel Barnier and François Bayrou failed? Nothing is less certain, as the new Prime Minister does not have a stronger foothold in the French National Assembly. And a compromise seems difficult to find, especially since Jean-Luc Mélenchon, like Marine Le Pen now, is pushing for a new dissolution.

But there is no indication that a clearer majority would emerge from a new election. Political instability is therefore likely to continue, while the deterioration in public finances requires substantial measures. The public deficit is expected to reach 5.4% of GDP in 2025, the highest level in the eurozone.

All this comes at a time when Germany is expected to issue more debt to finance its recovery plan. For years, France benefited from the fact that Germany did not issue debt. Investors therefore had to turn to OATs. This additional demand helped to keep French interest rates down.

The risk-free status of OATs is already being called into question. According to an analysis by Goldman Sachs, several companies are now borrowing at lower rates than the French government, including L'Oréal, Airbus, and Axa.

Source: marketscreener

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Adam

Stocks

Stocks Open Higher but Turn Lower as Fed Meeting Gets Underway

Daily S&P 500 Index (SPX)

U.S. equities started Tuesday on a positive note, with the S&P 500 touching fresh record territory, before slipping into negative territory later in the morning session.

As of 14:00 GMT, the Dow Jones Industrial Average was down 165 points, or 0.36%, at 45,718.41. The S&P 500 fell 0.08% to 6,609.79, while the Nasdaq Composite dipped 0.04% to 22,339.35. Traders are cautious as the Federal Reserve begins its two-day policy meeting.

Why Did Stocks Reverse After Record Highs?

The S&P 500 briefly hit 6,624.13 earlier in the session, extending Monday’s record close above 6,600. Gains were driven by strength in large-cap technology stocks and optimism around U.S.-China trade talks. However, profit-taking and investor caution ahead of the Fed’s policy announcement pulled indexes lower. Futures markets point to a fully priced-in quarter-point cut, but traders are bracing for Fed Chair Jerome Powell’s tone on future easing.

What Signals Came From U.S. Economic Data?

Retail sales rose 0.6% in August, doubling expectations of 0.3% and matching July’s upwardly revised pace. Excluding autos, sales gained 0.7%, showing strength across online shopping, restaurants, and apparel. Year-over-year, sales were up 5%, outpacing consumer inflation at 2.9%. The data points to resilient consumer demand, easing concerns that labor market softness might weigh on spending.

Which Companies Are Moving Markets?

Daily Oracle Corporation

Oracle surged 5% after reports it is part of a consortium aiming to secure TikTok’s continued U.S. operations.

Chipotle climbed 2% after expanding its buyback program by $500 million, and Novo Nordisk advanced 3% on promising trial data for its weight-loss drug.

Denny’s rose 1.5% as activist investors disclosed a 9.4% stake, while ArcBest gained 1% after boosting its buyback authorization.

On the downside, Dave & Buster’s sank 16% after posting weaker-than-expected earnings, while Adtran dropped more than 8% following a convertible notes offering.

Rocket Lab slid nearly 4% after announcing plans to sell $500 million in stock, and Oscar Health fell 4% on news of a $355 million debt sale.

Nvidia eased slightly after reports of weak demand for its China-focused RTX6000D chip.

What’s Next for Traders Watching the Fed?

Markets are firmly focused on Wednesday’s Fed decision and Powell’s press conference. While a rate cut is expected, the tone around inflation risks and future easing will determine whether equities can extend their record run.

Strong consumer data supports the bull case, but a hawkish shift could stall momentum. Traders should remain focused on Powell’s guidance as the key driver of near-term market direction.

Source: fxempire

Risk Warnings and Disclaimers

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Adam

Forex

European currencies are having a fantastic year, with the CHF, the Euro, and GBP achieving their best performance since the early 2000s.

With US President Trump doing everything he can to devalue the US dollar (tariffs, beefs with other countries, menacing the Fed's Independence, and Jerome Powell), and on the other side of the Atlantic, EU countries allying to boost productivity in the years to come, the conditions for such outperformance are optimal.

Regarding basic economics, one thing to watch for Europe and Switzerland could be a too-strong currency, which would impair exports in an already-cooling economy (and crippled with 39% tariffs with the US).

In fact, Switzerland has been in deflation since May 2025. While its economy continues to grow slowly, such economic activity is not expected to hold up much given the recent SNB dovishness.

UPDATE: New yearly lows recently got reached in a bearish acceleration – The US Dollar is really not liking Miran joining the FOMC committee right before the beginning of the Meeting!

In the current state of geopolitics, participants looking for safety have had enough of a yen that loses too much in Carry due to historically low rates and have come back to the Swissie in search of value amid a less-competitive dollar.

Swiss franc leads majors as US session begins and reclaims 2025 crown_1

2025 Currency Performance, September 16, 2025

This nice graph offered by InvestingLive depicts how strong the geographic trends (mentioned through many of our previous pieces) guide Forex performance.

European currencies are leading with the new shift in narrative, followed by APAC (JPY, NZD and AUD) and finally North-American currencies which have struggled quite a lot.

Tomorrow should be interesting as traders really are pre-selling the US Dollar in what seems to be rushed-hedges for a dovish FOMC.

Any hawkishness or even a more neutral than dovish tone, and/or mentioning of tariff uncertainty should lead to consequent mean-reversion for the USD.

More mentions towards labor market weakness and one time tariff price hikes would be confirming the USD down-move.

Up about 0.80% as we speak, let's have a look at USDCHF multi-timeframe charts to gain our edge on potential reversal or continuation levels for the pair.

USDCHF multi-timeframe analysis ahead of the FOMC

USDCHF Daily chart

USDCHF Daily Chart, September 16, 2026

Despite a strong rebound in the USD in July followed by a monthly consolidation in August, the selling in CHFUSD has started to accelerate since the September NFP release, breaching 0.80 psychological level.

The first time the level was breached in 2025 was in mid-June, when Powell testified. Early July consequently saw a huge reversal higher in the pair.

The breakdown has happened on a few strong bear bars and bears should soon face the 2025 0.7875 Lows support, with prices entering that region.

Daily RSI still has place for movement and is not showing signs of upward tilt – However, one cannot forget that things may change in a flash in tomorrow's FOMC announcement.

USDCHF 4H Chart

USDCHF 4H Chart, September 16, 2026

The ongoing price action is a solid tight bear channel, with traders rushing to exit and hedge their positions before tomorrow's huge trading Session.

Reactions will be interesting as this morning saw another rejection of the 50-period MA at the conjunction of the 2025 downward trendline, which led a huge descent in prices.

USDCHF is now trading around the middle of a freshly formed channel (with the 2025 downtrend) and with oversold RSI conditions, it will be interesting to spot what traders look to do looking forward.

Trading Levels for USDCHF

Daily Resistance Levels

0.7970 MA 50

0.80 psychological level

Long-term pivot 0.80 Zone (0.80 to 0.81)

Main resistance 0.8150 to 0.82 (last highs 0.8165)

May 2025 highs 0.8475 Resistance Zone

Daily Support Levels

0.7890 current daily lows and counting (and middle of downward channel)

0.7840 to 0.7875 2025 lows

0.77 to 0.7735 August 2011 lows

USDCHF 1H Chart

USDCHF 1H Chart, September 16, 2026

A measured move would place the pair to new lows in 2025 as the imminent selling accelerates after the Retail Sales data.

On the other hand, watch for the way oversold levels – The tight bull channel is expected to hold as long as no bull candle closes above the previous one, so sellers are tightly in control for now.

Watch price action in any close above the 0.7950 short-term pivot zone and any potential acceleration above 0.80. If the current trend continues, look at the 2011 support levels.

Source: marketpulse

Risk Warnings and Disclaimers

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Thomas

Economic

Trade discussions between Indian and U.S. officials on Tuesday were "positive" and "forward-looking", New Delhi said, after President Donald Trump struck a more conciliatory tone following punitive tariffs on India over its Russian oil purchases.

A U.S. delegation led by Brendan Lynch, Assistant U.S. Trade Representative for South and Central Asia, met Indian trade officials headed by Chief Negotiator Rajesh Agrawal in New Delhi.

“It was decided to intensify efforts to achieve early conclusion of a mutually beneficial Trade Agreement,” India’s commerce ministry said in a statement, without giving details.

Talks covered bilateral trade ties, including a possible India-U.S. trade deal, it added.

Both sides are now expected to hold a formal sixth round of trade negotiations.

However, it was not immediately clear whether New Delhi would meet Trump administration's demand to cut Russian oil purchases, or open its agriculture and dairy sector for the U.S. companies, a major demand in the negotiations.

Trump last month imposed a 25% punitive levy on Indian imports from August 27, doubling overall tariffs to 50%, as part of Washington’s pressure campaign on Moscow over its invasion of Ukraine.

A planned U.S. delegation visit to New Delhi from August 25-29 was cancelled after talks stalled, with India resisting U.S. demands to open its vast farm and dairy markets.

India’s exports to the U.S. fell to $6.86 billion in August from $8.01 billion in July, trade ministry data showed on Monday.

Exporters have warned the full impact of higher tariffs would be felt from September, once the new duties took effect.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Samantha Luan

Economic

Forex

Political

The White House has ramped up its vow for vengeance in the wake of conservative activist Charlie Kirk's assassination, with deputy chief of staff Stephen Miller promising to bring the resources of the federal government to bear against what he described as "terrorist networks."Vice President JD Vance, meanwhile, argued that those identifying as liberals were largely to blame for political violence and endorsed efforts to shame and make job trouble for those publicly cheering Kirk's death.

Their comments came Monday during an episode of Kirk's namesake podcast, which Vance hosted from his ceremonial office at the Eisenhower Executive Office Building."It is a vast domestic terror movement," said Miller, speaking of left-wing political organizations."With God as my witness, we are going to use every resource we have at the Department of Justice, Homeland Security and throughout this government to identify, disrupt, dismantle and destroy these networks and make America safe again for the American people," he added. "It will happen, and we will do it in Charlie's name."

Vance, who counted Kirk as a close friend and credited him Monday for his ascendance to the vice presidency, said he is "desperate" for unity. He also said he believes it's impossible without pushing back on left-leaning individuals and groups that he described as being more supportive and condoning of political violence."When you see someone celebrating Charlie's murder, call them out," Vance added. "And, hell, call their employer. We don't believe in political violence, but we do believe in civility, and there is no civility in the celebration of political assassination."

Vance cited numbers from a YouGov survey, conducted after Kirk's assassination, in which 24% of respondents who described themselves as "very liberal" said it was "always" or "usually" acceptable to be happy about the death of a political figure they oppose. Only 3% of those who described themselves as "very conservative" answered that way.In the same survey, 26% of liberals from the ages of 18 to 44 said political violence can sometimes be justified. (Some academic research has cast doubt on whether eye-catching opinion surveys are accurately capturing true levels of support for political violence.)

"This is not a both-sides problem," Vance said. "If both sides have a problem, one side has a much bigger and malignant problem, and that is the truth we must be told."He added, a moment later: "While our side of the aisle certainly has its crazies, it is a statistical fact that most of the lunatics in American politics today are proud members of the far left."Tyler Robinson, 22, was arrested and faces charges of aggravated murder, felony discharge of a firearm causing serious bodily injury, and obstruction of justice in connection with last Wednesday's shooting in Utah. Full details about a motive are not yet known, though FBI Director Kash Patel said in a Fox News interview Monday that Robinson's actions were premeditated and based on his political, left-leaning beliefs.

Vance at one point aimed his ire The Nation, a progressive magazine that he accused of falsely smearing Kirk after his death. Vance also, as Trump has done in recent days, singled out George Soros, the 95-year-old Democratic megadonor and the founder of the Open Society Foundations, which he said has helped fund The Nation.In a statement, a spokesperson for the magazine said that it has "never received funding from George Soros" or the Open Society Foundations. The spokesperson also said that the magazine stands by the article Vance attacked but that it has "clarified the phrasing of a quote by Kirk that Vice President Vance referenced."

A spokesperson for the Open Society Foundations said the organization has "unequivocally condemned the horrific murder of Charlie Kirk.""We oppose all forms of violence and condemn the outrageous accusations to the contrary," the spokesperson added. "Our work is entirely peaceful and lawful. It is disgraceful to use this tragedy for political ends to dangerously divide Americans and attack the First Amendment."

At one point during Monday's two-hour podcast, Vance spoke of the intimidation that he said a senior White House staffer who was friends with Kirk had faced since the assassination: "left-leaning" operatives circulating leaflets and encouraging the staffer's neighbors to "harass him, or, God forbid, to do worse."

"While he was mourning his dead friend, he and his wife had to worry about the political terrorists drawing a big target on the home he shares with his young children," Vance said. "Are these people violent? I hope not, but are they guilty of encouraging violence? You damn well better believe it."Besides Miller, other guests during the program included White House chief of staff Susie Wiles, press secretary Karoline Leavitt and Tucker Carlson, the conservative commentator who is also close with Trump and Vance. All hailed Kirk as a transformative figure in Republican politics. Some were milder in their interpretations of what his legacy should yield.

"I think it's our mission to go out there and embolden young conservatives — young Christians, most importantly — to go out there and continue to do his work, because it's exactly what he would want," Kaelan Dorr, the deputy White House communications director, told Vance. "He would want you to go find five people who don't believe in Jesus that day and give them a good lecturing, and walk them through everything in a way that is respectful and is, you know, grounded in fact. And I don't know how we replace that, but I think the energy that I'm seeing amongst people is just palpable."

Vance made several overtures to the many Democrats that he acknowledged do not condone such tactics or violence."Now I have heard many calls in the last few days for unity and for healing in the wake of Charlie's assassination," he said. "You have no idea how desperately I want that, how gratified I was when Democratic friends and even former Senate colleagues reached out to offer their condolences to me. I'm so thankful, and I know there are so many like them all across our great country. I am desperate to wrap my arms around them, as we all unite to condemn political violence and the ideas that cause it."Vance also called on the same people he urged to target those celebrating Kirk's death to get involved in Turning Point USA, the political organization Kirk leaves behind.

"It's the best way to honor Charlie's legacy," Vance said. "Start a chapter of TPUSA, or get involved in the one that already exists. If you're older, volunteer for your local party, write an op-ed in your local paper, run for office.""I can't promise you this is going to be easy," Vance added. "Can't promise you that all of us will avoid Charlie's fate. Can't promise you that I will avoid Charlie's fate. But the way to honor him is to shine the light of truth like a torch in the very darkest places."