Tonight (2 AM ET on March 18, releasing around 3 PM Hong Kong time), the Fed's FOMC meeting results are essentially settled: holding rates steady at 3.50%-3.75%, with market pricing probability already approaching 99.5%+, almost no suspense. The key focus will be the dot plot (SEP) and Powell's press conference remarks for hawkish/dovish signals.

Current spot gold (XAU/USD) is oscillating around $4,990-5,010, showing a clear pullback of approximately 4-5% from the previous $5,200+ highs, with intraday weakness continuing. The decline is primarily driven by a stronger dollar and slightly rising Treasury yields.

Bullish/Bearish breakdown (updated version)

• **Bearish factors (greater near-term pressure):**
- Extended high-rate environment; real yield remains elevated, keeping gold's opportunity cost persistent.
- The dot plot will likely show 2026 rate-cut projections further reduced (from previous 1-2 cuts potentially pared to 0-1 cuts, or even no moves all year), as Iran conflict pushes oil prices higher → inflation expectations rebound, with the Fed favoring "higher for longer."
- Dollar index showing strong near-term rebound, depressing non-USD assets.
- Technical: The 5,000 level has broken; support below at 4,950-4,980; a break could accelerate decline to 4,900 or even 4,850.

• **Bullish support (still strong medium-to-long term):**
- Geopolitical risks (Iran/Middle East tensions) remain far from resolved; safe-haven demand is hard support—gold is fundamentally an "asset for chaotic times."
- Central bank gold purchases + ETF inflows trend unbroken; institutional gold allocation logic unchanged.
- Inflation concerns (elevated oil prices) may eventually force the Fed dovish, just delayed.
- Most major banks (e.g., J.P. Morgan, Goldman Sachs) still target 5,000-5,400+ by end-2026; long-term bullish bias intact.

**Three possible scenarios tonight and gold's reaction**

1. **Most likely (70%+ probability): Neutral-to-hawkish** – Hold rates + reduce rate-cut projections + Powell emphasizes "rising inflation risk, data dependence, no rush to cut." → Gold likely declines another 1-2%, tests 4,950-4,980 support, possibly dipping briefly to 4,900. Asia/Europe sessions may rebound first, but sold under pressure into US session.

2. **Dovish surprise (low probability, but if Powell mentions labor market weakness or oil only temporary)** → Gold rallies quickly, returns to 5,050-5,100, even breaks through 5,150. However, current market pricing is too hawkish; upside surprise room is limited.

3. **Extreme hawkish (small probability)** – Dot plot shows zero cuts in 2026 + Powell very firm. → Gold panic selling, breaks 4,900, heads toward 4,800-4,850. But this would trigger larger safe-haven rebound; possible V-shaped reversal next day.

**My recommendations (Hong Kong perspective)**

• **Near-term (tonight to tomorrow)**: Favor wait-and-see over rushing to buy the dip. Wait for decision finalization + Powell's completion, then check the one-hour chart. Only consider long positions if closing above 5,000.

• **Medium-term (next 1-2 months)**: Still bullish; geopolitics + central bank buying provide confidence. A pullback to 4,900 is an excellent re-entry point.

• **Operationally**: Aggressive traders can run small positions to play post-decision rebound (stop loss below 4,950); conservative players wait for stabilization, targeting 5,200-5,300 first.

Gold now is a "seesaw between high rates and high geopolitical risk." The Fed's remarks are the short-term key, but the long-term keys are in geopolitics and central banks' hands. Be patient; don't let tonight's statement scare you off.