The US Dollar tumbled alongside the US Treasury bond yields after the Fed's economic projections, the so-called Dot Plot chart, still predicted three rate cuts this year as seen in December. Markets had begun pricing two Fed rate cuts this year after two consecutive months of higher inflation readings.
The median Fed dot plot for 2024 was unchanged despite a 0.2% increase in the median 2024 Core PCE inflation. This was perceived as dovish by markets, throwing the Greenback under the bus while driving Gold price to a new all-time high beyond the $2,200 threshold.
The Fed kept the key rates unchanged between the 5.25% to 5.50% target range on Wednesday, with Chair Jerome Powell emphasizing that recent high inflation readings had not changed the underlying "story" of slowly easing price pressures in the United States (US).
Markets are now wagering a 75% probability that the Fed will begin easing in June, up from 59% on Tuesday, according to the CME Group's FedWatch Tool.
Looking ahead, the S&P Global US preliminary PMIs and Fedspeak will remain in focus for a fresh boost to Gold price.
Gold price technical analysis: Daily chart
Gold price confirmed a Bull Flag after closing Wednesday above the falling trendline resistance at $2,161.
If Gold buyers regain poise, the next relevant bullish targets are seen at the record high of $2,223 the $2,250 psychological level.
The 14-day Relative Strength Index (RSI), however, is in the highly overbought terrain, suggesting that the recent pullback could likely extend before the upside resumes.
On a daily closing below the $2,200 mark, Wednesday’s high of $2,189 will be put to the test.
Acceptance below the latter will open up a fresh downside toward Monday’s low of $2,146, below which the falling trendline support at $2,138 will come to buyers’ rescue.