Gold Prices Expected to Swing $4,200-$4,435 as Fed Decision Looms

GCAP GOLD analyst Areerat Murachai said gold prices this week are expected to remain volatile, with the key driver being the Federal Reserve meeting on September 15-16, which will determine the new direction for gold prices. Although markets have already largely priced in the possibility of a rate increase, investors should focus on the Fed's Dot Plot and the chairman's statement, as these will reflect future monetary policy guidance. If the Fed raises rates as expected but signals no further increases ahead, gold may recover because the market has already factored in that risk. However, if the Dot Plot leaves room for another rate hike, particularly at the December meeting, this could support bond yields and the dollar, pressuring gold in the short term. On the economic front, August's Consumer Price Index rose 0.4% month-over-month, while Core CPI increased 0.3%, signaling inflation pressures that remain at a level warranting Fed caution and raising concerns about prolonged monetary tightening. Meanwhile, Middle East tensions have added risk to energy prices and inflation, following drone attacks on Saudi Arabia's East-West oil pipeline and reports of ships attacked near the Strait of Hormuz. These developments have raised concerns about oil supply and may keep crude prices elevated, leading markets to worry the Fed may need to maintain tight policy longer than expected, adding further pressure to gold. GCAP GOLD forecasts this week's gold range at $4,200-$4,435, with key support at $4,280 (approximately 67,000 Thai baht). If prices hold and build a base above this level, gold could rally to test $4,400 (around 68,500 baht). The firm recommends waiting for prices to stabilize before buying and avoiding chasing rallies. If $4,280 breaks clearly, wait for a new base to form between $4,225-$4,200 (roughly 65,900 baht) to limit exposure to volatility.