Gold fell by over 1% after the Federal Reserve kept rates unchanged and Jerome Powell said he would stay on the Board until a criminal investigation is dropped. XAU/USD traded at $4,546 after a daily high of $4,610.
The FOMC held rates at 3.50%–3.75% with an 8–4 split, the most divided vote since 1992. Stephen Miran backed a cut, while Beth Hammak, Neel Kashkari and Lorie Logan opposed adding an easing bias.
Dollar And Yields Pressure Gold
The US Dollar Index rose 0.37% to 98.96 and the 10-year Treasury yield was up 8 basis points at 4.43%. Money markets priced a 29% chance of a rate rise at the April 2027 meeting, based on Prime Terminal data.
US Core Durable Goods Orders rose 3.3% after 1.6% in February, above the 0.6% forecast. Total orders moved from a 1.2% annual fall to a 0.8% rise, beating the 0.5% forecast.
Gold was near four-week lows around $4,510; below $4,500, supports are $4,482, $4,351 and the 200-day SMA at $4,269. Resistances are $4,600, the 100-day SMA at $4,753 and the 50-day SMA at $4,848.
The divided Federal Reserve vote signals significant uncertainty for the weeks ahead, creating an ideal environment for volatility plays. The sharp rise in Treasury yields to 4.43% and the stronger dollar are the most important immediate reactions we are seeing. Traders should anticipate wider price swings as the market digests this new, less predictable policy landscape.
Options Strategies For A Volatile Fed
With gold breaking below key support levels, bearish positions appear favorable in the short term. Buying put options on gold futures or related ETFs offers a defined-risk way to target the $4,482 and $4,351 support zones. We should remain cautious, as any escalation in the political drama surrounding Powell could trigger a flight-to-safety rally.
The Fed’s reluctance to signal a clear path toward easing is supported by incoming data. This morning’s Core PCE price index reading for March came in at 3.1%, stubbornly above target and reversing the progress we saw late in 2025. This, combined with last week’s jobless claims falling to a six-month low of 195,000, removes any urgency for the Fed to cut rates.
We should expect the US Dollar to remain strong against other major currencies, making call options on the DXY attractive. Similarly, the upward pressure on interest rates suggests a strategy of buying puts on long-duration Treasury bond ETFs. The market is now pricing a non-zero chance of a hike by next year, a dramatic shift from just a few months ago.
Given the deep policy split, buying call options on the VIX index provides a direct hedge against rising market turbulence. This level of internal disagreement at the Fed hasn’t been seen since the early 1990s, a period that was also marked by significant policy uncertainty. Any unexpected headlines from Washington or surprising economic data could now have an outsized impact on asset prices.
