2025-09-19 Sing Pao's Column《真金白銀》(English translation) Fed Rate Cut Triggers Volatile Gold Reversal

Fed Rate Cut Triggers Volatile Gold Reversal

The U.S. Federal Reserve concluded its two-day policy meeting by cutting interest rates by 25 basis points, bringing the federal funds target range down to 4.00%–4.25%. This marks the first rate cut since December 2024. The FOMC statement acknowledged rising downside risks to the labor market, with unemployment ticking slightly higher while still remaining low. Going forward, the Fed emphasized a data-dependent approach, carefully assessing evolving conditions and risks.

The gold market reacted with intense volatility. Spot gold initially spiked to a record USD 3,707 per ounce, only to reverse sharply and close Wednesday at USD 3,660, down nearly 1% on the day. Year-to-date, gold is up 39%, but Fed Chair Jerome Powell’s remarks triggered investor reassessment of profit-taking opportunities.

Gold Analysis: Uptrend Intact, but High Volatility Warrants Caution

On the daily chart, gold appears overbought, with prices pulling back swiftly from above USD 3,700. The Relative Strength Index (RSI) surged to 80, and momentum indicators also entered overbought territory—though no immediate signs of exhaustion are present. Prices remain well above all major moving averages, indicating that the broader uptrend is still intact.

On the 4-hour chart, indicators remain sharply bullish. The 20-period Simple Moving Average (SMA) offers support near USD 3,642, while the 100- and 200-period SMAs continue to slope upward. Given the extent of recent gains, 1–2% pullbacks are to be expected, reinforcing the need for tighter risk management in this high-volatility environment.

Silver: Watching for Breakout or Pullback Amid Mixed Signals

Silver currently trades within a key long-term resistance/support zone. The short-term trend remains positive, with the 20-day EMA sloping upward around USD 40.75, and the 14-day RSI cooling to 63.00, possibly stabilizing near the 60.00 level. If RSI holds above 60, a new bullish impulse may emerge.

A confirmed breakout above the USD 42.75–43.00 range could pave the way for further gains. However, failure to breach this level—or a renewed U.S. dollar rally—may lead to a retest of support near USD 40.55. Market participants should monitor Fed policy cues and currency market movements for directional confirmation.

Crypto Markets: Active Rotation, But Direction Still Murky

In the current rate-cutting cycle, crypto markets are active but directionless. Bitcoin briefly tested the USD 116,000 level before hitting resistance. While Ethereum (ETH) has posted strong year-to-date gains, momentum has recently slowed. In contrast, high-volatility Layer 1 tokens like Solana (SOL) and Avalanche (AVAX) have seen a spike in trading activity, suggesting investors are rotating into riskier assets with higher upside potential.

From a structural perspective, exchange balances for Bitcoin remain near multi-year lows, indicating reduced sell pressure and offering potential upside support. Sentiment remains broadly optimistic, but investors are waiting for clear macro and policy signals. As the market leader, Bitcoin remains pivotal—yet altcoins will only rally meaningfully if they overcome resistance or find fresh catalysts. Disclaimer:

This column is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell financial products. Investing involves risk. Readers are advised to assess their personal financial situation carefully and consult independent professional advice before making any investment decisions.