The Fed interest rate & Hawkish speech by FED will influence today’s gold price – 29-1-2025

On January 29, 2025, gold prices (XAUUSD) are expected to face downward pressure following the Federal Reserve’s rate cut update and Fed Chair Jerome Powell’s hawkish speech. While markets anticipated a potential rate cut, Powell’s cautious tone regarding future monetary policy has led to expectations of a slower pace of easing, strengthening the US dollar and Treasury yields, which negatively impact gold prices.

Today’s given signal : https://t.me/calendarsignal/16787

Key Variables & Definitions:

▪️r = Fed Interest Rate Decision (Current: Unchanged)
▪️d = Dot Plot Rate Cut Expectations
▪️p = Powell’s Tone (Hawkish or Dovish)
▪️m = Market Expectations (Current: 2 rate cuts in 2025)
▪️L = Labor Market Strength (Based on NFP Data)
▪️I = Inflation Trends (Based on CPI Data)
▪️X = Market Reactions (Gold, Stocks, USD)

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Scenario 1: Hawkish Tone (Likely)

▪️Current Expectations: m=2 cuts
▪️Fed’s Revised Stance: d=1 cut

Market Impact:
▪️Gold (G) = Bearish (G↓)
▪️US Dollar (D) = Bullish (D↑)

Mathematical Adjustment:
m=f(d,p)=2−1=1
If d=1 (only one cut), investors will revise expectations downward, causing pressure on risk assets.

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Scenario 2: Dovish Tone (Less Likely)

▪️Current Expectations: m=2 cuts
▪️Fed’s Reinforced Stance: d=2 cuts (as expected)

Market Impact:
▪️Gold (G) = Bullish (G↑)
▪️US Dollar (D) = Bearish (D↓)

Mathematical Adjustment:
m=f(d,p)=2−0=2
If d remains at 2, expectations remain stable, leading to positive sentiment for risk assets.

Probability of Both Scenarios is given below:-
Hawkish Fed (1 Cut):- 60%
Dovish Fed (2 Cut):- 40%

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Key Takeaways:-

▪️Market’s reaction depends on how Powell shifts expectations (m).
▪️If prediction of a hawkish shift is correct, risk assets (Gold & Stocks) will fall, while USD will rise.
▪️The most significant factor is the Fed adjusting its 2025 rate-cut outlook (d).

This Fed meeting will reset expectations for the entire year 2025 .

Previous released data results :

On last FED Rate cut and Powell speech (18-12-2024) we predicted Dovish speech, as per that we suggest to BUY XAUUSD & as a result, we made a profit of 15 points according to the signal we gave.

Check the previous blog : https://blog.forextrade1.co/impact-on-xauusd-price-to-amid-fed-rate-cut-and-powells-dovish-speech-18-12-2024/
Check last given signal : https://t.me/calendarsignal/16422
Performance : https://t.me/calendarsignal/16435

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