The Federal Reserve kept its policy rate unchanged at 3.5%–3.75% at the April FOMC meeting, in line with market expectations. However, the key focus was on a marginally more hawkish shift in communication and an unusually high level of internal dissent.

This meeting saw four dissenting votes—the most since October 1992. Importantly, the breakdown of dissent signals a nuanced policy divide: one member supported an immediate 25bp rate cut, while three members opposed the statement’s perceived easing bias, rather than explicitly calling for rate hikes. These more hawkish policymakers pushed to remove forward guidance that could be interpreted as leaning toward future easing, preferring a more neutral stance that leaves open the possibility of either rate hikes or cuts. This reflects heightened concern over persistent inflation risks and an effort to avoid reinforcing one-sided market expectations.

Compared with the March meeting, a broader group of officials showed support for revising the statement in a more hawkish direction. The Fed also emphasized the wide-ranging and highly uncertain implications of geopolitical tensions in the Middle East, particularly through potential energy supply shocks. Policymakers signaled that they would wait for clearer trade-offs between inflation and labor market conditions before adjusting the policy path.

Jerome Powell noted that energy supply shocks pose two-sided risks to the Fed’s dual mandate of maximum employment and price stability. He stressed that the current policy stance remains sufficiently restrictive to respond to such shocks. This suggests that the Fed is unlikely to ease prematurely in response to growth concerns, reinforcing a data-dependent and cautiously hawkish stance.

Despite multiple headwinds—including a hawkish Fed shift, rising U.S. Treasury yields, and a stronger dollar—gold prices have shown notable resilience. Markets had already priced in a delay in rate cuts, and while the Fed’s tone was hawkish, it did not exceed expectations. As a result, a “bad news priced in” dynamic emerged, with bearish positioning largely exhausted and limited momentum to push gold lower.

At the same time, geopolitical risks in the Middle East remain unresolved, and uncertainty surrounding energy supply continues to support safe-haven demand. This underlying risk premium has helped offset the pressure from higher interest rates. In addition, continued gold purchases by major economies such as China have provided structural support, limiting downside risk.

Market Outlook

On the H4 timeframe, gold is gradually rebounding, with the MACD lines and histogram contracting near the zero axis, indicating weakening bearish momentum.

The market is increasingly pricing in the longer-term narrative that prolonged high interest rates will eventually weigh on economic growth. Although rate cuts have been delayed in the short term, the long-term easing expectation remains intact. Once economic data weakens or inflation shows a clear downward trend, gold could see a rapid upside revaluation.

The Fed Turns Increasingly Hawkish — Yet Gold Refuses to Fall: Is Opportunity Brewing?