ETO Markets Global Pulse: Gold Drops Nearly 4% as Fed Holds Rates, Signals Hawkish Outlook

Market Review

According to ETO Markets monitoring, on March 18 (Wednesday) gold prices declined sharply. Spot gold fell nearly 4% to close at USD 4,818.83/oz, briefly touching USD 4,804.71/oz intraday, marking a more than one-month low. The Federal Reserve held rates unchanged while delivering a more hawkish signal, putting pressure on gold.

During Asian trading on March 19 (Thursday), spot gold fluctuated within a narrow range and was trading near USD 4,831/oz.

Global Headlines

Fed Holds Rates, Raises Inflation Forecasts

The Federal Reserve kept its policy rate unchanged and added language highlighting uncertainty from Middle East developments. Inflation forecasts for this year and next were revised higher. The dot plot shows most officials expect only one rate cut this year, indicating a more cautious policy stance.

Rate-Cut Expectations Repriced Lower

CME data shows markets assign a 100% probability of no rate change in April, while the probability of a June rate cut has dropped to 11.2%. Expectations for easing have narrowed significantly, with rate outlook shifting higher.

Powell Signals Potential Impact on Fed Leadership Path

Jerome Powell stated that he would remain in his role if a successor is not confirmed and indicated he would not step down from the Board until ongoing investigations conclude. His remarks may affect future Fed leadership arrangements and policy continuity.

Iran–Israel Conflict Expands to Energy Infrastructure

Strikes between Iran and Israel have extended to energy facilities, with targets in Qatar and across the Gulf region affected. The widening conflict has increased uncertainty around global energy supply.

ETO Markets Analyst View (Spot Gold)

From a technical perspective, USD 4,895 stands as the key near-term resistance. As long as prices remain below this level, gold stays biased to the downside, with targets at USD 4,775 and USD 4,740. A break above USD 4,895 could open room for a rebound toward USD 4,940 and USD 4,975.

RSI remains below the neutral 50 level, indicating weak short-term momentum. Gold is currently being pulled between tightening rate expectations and ongoing geopolitical risks, with volatility significantly elevated. Investors should carefully assess trading rhythm and risk exposure.

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