Federal Funds Rate Cut in Focus: Can Gold Break Above $3,700?

September 17, 2025

Recently, gold has become a hot topic and asset of choice for traders and investors. This significant increase is an opportunity that trend followers have been waiting for to gain profits. recorded gold movement :

Sep 9–15: Spot gold climbed from around US $3,626 (Sep 9) to US $3,683 (Sep 15), marking a weekly gain of about +1.7%.
Sep 16: Gold hit a new record high around US $3,690–3,704 before closing near US $3,694.
Sep 17: Prices pulled back slightly to around US $3,679–3,680, down about 0.4%.

Overall, gold rallied strongly through midweek, reaching a fresh record high before facing a minor correction

Figure 1. XAUUSD H4 Chart – Sept 17, 2025

Highlight Fundamental this Week

Federal Funds Rate (Sep 18 Thu)

Current Situation & This Week’s Event

Expected Rate Cut

Markets are strongly anticipating that the Fed will cut interest rates at this week’s FOMC meeting, most likely by 25 basis points (bps). There’s a smaller chance of a 50 bps cut, but probabilities remain low.

Why the Cut?
- Recent inflation data (especially PPI/wholesale prices) came in weaker than expected.
- Labor market growth has slowed, raising concerns about an economic slowdown.
- Political pressure (from President Trump) has also added weight on the Fed to cut rates more aggressively.
Impact on USD & Financial Markets
- The US dollar has weakened against major currencies as traders price in a dovish Fed.
- Equities and bonds have rallied on expectations of lower borrowing costs.
Gold Rally
- Gold has surged to fresh record highs around $3,680–$3,690/oz, driven by the weaker dollar and Fed cut expectations.

Technical Analysis

From a technical perspective, the overall outlook for gold still points toward further upside momentum. However, as with any strong rally, the market rarely moves in a straight line. A corrective phase is often needed before prices can gather strength for the next leg higher.

On the H4 timeframe, a well-defined demand zone is visible. This area could act as a strong cushion, offering the potential for price to rebound and resume its upward trajectory. Traders will be closely watching this level as a possible springboard for the next bullish wave.

Figure 2. XAUUSD H4 Chart – Sept 17, 2025

Alternatively, if the market shows no interest in pulling back. In that case, a clean breakout above resistance could unlock another leg of bullish continuation, pushing prices to new highs.

In short, whether through a healthy correction or a direct breakout, the technical setup suggests that gold remains biased to the upside. For traders, this is a market that continues to offer opportunities—both for those waiting for a retracement and those riding the momentum of the breakout.