Gold hits record highs ahead of FOMC! Tech Setup

Gold reached fresh all-time highs near $3690 ahead of Wednesday's FOMC meeting. Its rally reflects a perfect storm of Fed dovishness and geopolitical tensions, but technical divergences suggest positioning carefully ahead of Powell's decision. The 100% Fib extension and double divergence setup makes any hawkish surprise particularly dangerous for leveraged longs.

CATALYSTS DRIVING THE RALLY:

• Fed rate cut fully priced in (25bps expected, some 50bps speculation)
  
• US-China tensions escalate (Nvidia antitrust accusations)
  
• Stephen Miron confirmed to Fed Board of Governors (dovish member)
  
• Dollar weakness supporting precious metals
  
• Surprising correlation: Nasdaq & S&P 500 also hit records alongside gold
  

TECHNICAL LEVELS:

Resistance:

$3,700 - Key psychological level
$3,750 - Next major target
$3,800 - Extended upside if dovish

Support:

$3,660 - First support for entries
$3,610 - Major support level
Previous swing lows - Stop loss reference

WARNINGS:

• Double divergence on 4H & 1H timeframes
  
• 100% Fibonacci extension reached
  
• RSI overbought conditions
  
• Momentum diverging from price action
  

FOMC SCENARIOS:

Bullish Case: Dovish 25bps + accommodative guidance → Target $3,750-$3,800
Risk Case: Hawkish surprise or even neutral tone → Profit-taking toward $3,600-$3,500

KEY RISKS:

• Powell emphasising inflation persistence
  
• Resistance to aggressive cutting cycle
  
• Hawkish dot plot projections
  
• Any break below $3,660 signals deeper correction potential
  

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