Gold's technical picture reveals a market at a crucial inflection point. The metal is currently testing key support in the $3,315-$3,326 range after breaking below its ascending triangle pattern. Technical indicators present mixed signals that warrant careful attention from traders.

The 20-day moving average at $3,234.68 (SMA) and $3,241.57 (EMA) shows gold trading around these levels, indicating a consolidation phase. RSI readings between 41.845 and 52.12 suggest neutral momentum, neither overbought nor oversold. The ADX at 48.422 indicates strong trend strength, though the MACD in negative territory at -15.75 signals weakening bullish momentum.

"Silver faces significant technical headwinds with all moving averages positioned above the current price, generating a strong sell signal across multiple timeframes. However, the deeply oversold RSI reading of 24.839 suggests potential for a technical bounce."

The Federal Open Market Committee's two-day meeting concludes tomorrow with a policy statement at 2:00 PM ET, followed by Chair Jerome Powell's press conference at 2:30 PM. Markets assign a 93.6% probability to rates remaining unchanged at 4.25%-4.50%, marking the fourth consecutive meeting without adjustment.

This persistent inflation above target creates a favorable environment for gold as an inflation hedge. The Dollar Index (DXY) strengthened to 98.7-99.04 today, gaining 0.40-0.60% on the day. Despite this short-term strength, the dollar remains down 6.72% versus July 2024 levels, providing longer-term support for precious metals prices.

Institutional demand for precious metals remains exceptionally strong, with global gold ETFs attracting $38 billion in inflows during the first half of 2025—the strongest semi-annual performance since H1 2020. Holdings reached 3,616 tonnes by end-June, the highest level since August 2022.

Regional ETF activity shows North America leading with $21 billion inflows in H1, the strongest first half in five years. Asia recorded a remarkable $7.3 billion in April alone, contributing 28% to global flows despite holding only 9% of AUM. Silver ETFs have attracted 95 million ounces in H1 2025, already exceeding full-year 2024 inflows.

Central banks purchased 244 tonnes of gold in Q1 2025, marking the strongest first quarter on record. Poland leads with 67 tonnes through May, while China resumed buying after a six-month pause, signaling continued commitment to gold reserves despite already substantial holdings.

The structural shift in central bank behavior continues with 43% of central banks planning to increase gold holdings in 2025, up from 29% in 2024. An overwhelming 95% of central bankers believe global official gold reserves will continue rising, supporting expectations for a third consecutive year above 1,000 tonnes of annual purchases.

Safe-haven demand remains elevated with 59 active military conflicts globally—the highest number since World War II. Middle East tensions persist following Israeli strikes on Iranian nuclear facilities, while the Russia-Ukraine conflict shows no signs of resolution.

The VIX volatility index at 22.75 remains elevated above historical calm levels, indicating persistent market uncertainty. Trading volumes reflect this heightened activity with record H1 2025 gold trading volumes averaging $329 billion daily—the highest semi-annual figure on record.

COMEX gold futures continue to dominate trading with daily volume equivalent to 27 million ounces, 30 times higher than SPDR Gold ETF volumes. The latest Commitment of Traders report shows gold speculator bets rose to the highest level since March, with net long positions increasing by 39,923 contracts.

Major financial institutions have significantly upgraded their precious metals forecasts for 2025 and beyond. The precious metals market stands at a critical juncture with multiple catalysts converging.

The gold/silver ratio currently stands at approximately 87:1, well above the long-term historical average of 53:1. This elevated ratio suggests silver remains significantly undervalued relative to gold, presenting potential opportunities for ratio traders.

The precious metals complex remains in a powerful bull market supported by fundamental institutional demand, though short-term consolidation appears healthy after exceptional gains. Tomorrow's Fed decision represents the most significant near-term catalyst, with any dovish shift likely to propel gold toward the $3,400-$3,450 resistance zone.

Silver's deeply oversold technical condition combined with its undervaluation relative to gold presents compelling opportunities for investors willing to weather short-term volatility. The metal's growing industrial applications, particularly in green technologies, provide additional fundamental support beyond traditional investment demand.

As we await tomorrow's Fed decision, traders should prepare for increased volatility while maintaining focus on the longer-term bullish fundamentals. With major banks targeting $3,675-$4,000 gold by year-end and silver showing potential for significant catch-up performance, the precious metals sector continues to offer substantial opportunities for properly positioned investors.