Gold Struggles Below

 

Gold prices (XAU/USD) attempted to recover above the psychological $4,000 level on Friday after falling to $3,986 during the Asian trading session, marking the lowest level since July. The rebound came as bargain hunters entered the market following Thursday’s sharp sell-off, which saw the precious metal lose 2.81%.

Gold Technical Analysis: Bearish Momentum Persists

On the daily chart, XAU/USD continues to correct below all major moving averages, maintaining a bearish short-term outlook. Momentum indicators remain weak, with the Relative Strength Index (RSI) hovering around 35 and approaching oversold territory. Meanwhile, the Moving Average Convergence Divergence (MACD) remains below zero with a negative reading, indicating that selling pressure continues to dominate.

The Average Directional Index (ADX) has edged higher to around 24, suggesting that the bearish trend is gradually gaining strength.

On the upside, immediate resistance stands at the psychological $4,100 level, followed by another horizontal barrier at $4,200. The 100-day Simple Moving Average (SMA) at $4,224 reinforces this resistance zone and represents a major obstacle to any sustained recovery.

A break above this level could bring the 50-day SMA at $4,302 into focus, potentially opening the way toward the $4,400 area. Further resistance is located at the 200-day SMA near $4,509, which continues to define the broader bearish technical structure.

On the downside, failure to hold above $4,000 could trigger further losses, exposing initial support at $3,950, followed by the $3,900 zone. A sustained break below $3,900 could pave the way for a deeper decline toward $3,800.

Treasury Yields and Oil Prices Pressure Gold

Rabobank analysts described Thursday as a “brutal day for markets,” noting that the S&P 500 fell 1.2% to 7,663, dragged lower by the Philadelphia Stock Exchange Semiconductor Index, which moved toward its lowest level since July.

The sharp equity sell-off triggered a strong rally in government bonds. Rabobank highlighted that weakness in equities supported US Treasuries, with the benchmark 10-year US Treasury yield falling below 5% for the first time since September, despite higher energy prices. The two-year Treasury yield also dropped below 4.75%.

However, gold failed to benefit from falling equity prices and declining US Treasury yields on Thursday, as several other factors weighed on the precious metal.

Escalating Middle East tensions continued to support energy prices, with West Texas Intermediate (WTI) crude oil trading near $100 per barrel, close to a five-week high. Higher oil prices have intensified inflation concerns, strengthening expectations that interest rates could remain elevated for longer.

This outlook increases the opportunity cost of holding non-yielding assets such as gold, making the precious metal less attractive to investors.

Some traders may also have sold precious metals to cover losses in equities. Technical selling likely added further pressure after gold broke below the $4,100–$4,200 trading range that had largely held since early October.

US Dollar Stabilizes as Gold Remains Vulnerable

Against this backdrop, gold remains vulnerable to renewed selling pressure during temporary rebounds, particularly as the US dollar and Treasury yields show signs of stabilization following Thursday’s declines.

The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, traded around 101.78, up 0.14%. Meanwhile, the benchmark 10-year US Treasury yield stood near 4.99%.

Later on Friday, traders will focus on the preliminary October S&P Global Purchasing Managers’ Index (PMI) readings and the University of Michigan’s final consumer sentiment survey, including its inflation expectations component.

These economic indicators could influence expectations for the Federal Reserve’s monetary policy and determine whether gold can extend its recovery above $4,000.

Federal Reserve Meeting in Focus Next Week

The Federal Reserve is widely expected to leave interest rates unchanged after delivering a 25-basis-point rate hike in September.

Investors will closely monitor how policymakers balance persistent inflation risks against concerns that a slowdown in AI-related investment could weigh on economic growth.

Any indication that another rate increase remains possible in December could limit gold’s recovery. Higher interest rates generally support the US dollar and increase the opportunity cost of holding non-yielding assets, potentially keeping XAU/USD under pressure.

For now, the $4,000 psychological level remains a critical area for gold traders. Holding above this threshold could support a short-term rebound, while a decisive break below it would increase the risk of further declines toward $3,950, $3,900, and potentially $3,800.

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Gold Rebounds Below $4,100

 

Gold (XAU/USD) trimmed its sharp intraday losses after falling to a monthly low during Thursday’s early European session on October 22, 2026. However, the precious metal maintained a bearish short-term outlook, trading below the key $4,100 level.

The US Dollar (USD) remained under selling pressure as recent comments from Federal Reserve (Fed) officials suggested there was little urgency to raise interest rates at the October 27–28 policy meeting. Meanwhile, US Treasury yields extended their retreat from multi-year highs, weighing on the Greenback and providing some support for gold prices.

Gold Price Technical Outlook

The XAU/USD pair maintained a bearish bias below the 200-period Simple Moving Average (SMA) on the four-hour chart. The Moving Average Convergence Divergence (MACD) indicator remained in negative territory, with its line below the signal line, while the Relative Strength Index (RSI) hovered in the mid-30s.

Together, these momentum indicators suggest persistent selling pressure, although gold is approaching oversold conditions.

On the downside, initial support is located around $4,075–$4,065, near the monthly swing low. A sustained break below this zone could trigger additional selling, exposing the intermediate support area at $4,030–$4,025 before the psychological $4,000 threshold comes into focus.

On the upside, the $4,140 area represents the nearest resistance. A decisive move above this level could open the door for another attempt to reclaim $4,200. Sustained strength above $4,200 could push gold toward the 200-period SMA near $4,232. A breakout above this moving average would help ease the current bearish pressure and potentially pave the way for a more meaningful corrective rebound.

Fed Rate Hike Expectations Weigh on Gold

Despite the recent weakness in the US Dollar and Treasury yields, gold continues to face headwinds from expectations of tighter Federal Reserve policy.

US inflation data released last week reinforced market expectations of a potential rate hike. According to the CME Group FedWatch Tool, traders are pricing in approximately a 90% probability that the Fed will raise borrowing costs in December.

Volatile oil prices have also fueled inflation concerns, strengthening the case for further monetary tightening. This outlook remains a headwind for gold, which does not offer interest income. Meanwhile, ongoing geopolitical risks could limit losses in the safe-haven US Dollar, potentially capping further gains in the precious metal.

Middle East Tensions Support the US Dollar

Developments surrounding the Middle East crisis continue to influence market sentiment. Iranian Foreign Minister Abbas Araghchi said Tehran remained open to diplomacy while emphasizing the country's readiness to defend itself. He also expressed limited expectations for progress, arguing that Washington had shown little willingness to reach an understanding.

Separately, The New York Times reported that the United States and Israel had developed plans for a short but intensive military campaign against Iran following the US midterm elections. These geopolitical concerns could underpin demand for the safe-haven US Dollar and weigh on gold's recovery.

US Jobless Claims and Fed Meeting in Focus

Gold's acceptance below the psychological $4,100 level reinforces the risk of further downside in the near term. Traders are now looking to the weekly US Initial Jobless Claims report on Thursday for fresh trading signals, followed by preliminary global Purchasing Managers' Index (PMI) data on Friday.

Nevertheless, the main focus remains on next week's Federal Open Market Committee (FOMC) meeting, which could provide further clues about the Fed's interest rate outlook and the next major direction for gold prices.

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Gold Prices Rebound

 

Gold prices edged higher after recovering from weekly lows near $4,100, but the upside remains limited by a bearish fundamental backdrop. Inflation risks driven by volatile oil prices are reinforcing expectations that the US Federal Reserve (Fed) could tighten monetary policy further. Meanwhile, a modest recovery in the US Dollar from a three-week low is adding pressure on bullion and limiting its recovery potential.

Technical Outlook: Gold Remains Bearish

Gold's failed attempt to break above the 100-period Exponential Moving Average (EMA) on the four-hour chart, followed by a subsequent decline, reinforces the negative technical outlook.

The Moving Average Convergence Divergence (MACD) indicator remains in negative territory, with its latest reading at -4.65. Meanwhile, the Relative Strength Index (RSI) stands at 39.16, indicating weak momentum without yet signaling oversold conditions.

A sustained break below the $4,100 level would strengthen the bearish bias and expose the monthly swing low near $4,066.

Further selling pressure could accelerate losses toward the psychological $4,000 mark, followed by the year-to-date low around $3,943–$3,942, recorded in June.

On the upside, the 100-period EMA near $4,175 is likely to act as the nearest significant resistance. A sustained move above this barrier would be needed to ease the current bearish pressure and open the door to a stronger recovery.

Oil Volatility Supports Fed Rate Hike Bets

Crude oil prices experienced a dramatic intraday reversal on Tuesday, retreating from a more-than-one-month high amid renewed hopes for US-Iran peace negotiations.

An unconfirmed report suggested that Qatar and Pakistan had proposed a compromise plan to Washington and Tehran that could address both sides' demands. However, Bloomberg subsequently reported that a diplomat involved in the negotiations denied reports that an agreement was close.

Iranian state media also reported that Parliament Speaker Mohammad Bagher Ghalibaf told Pakistan's army chief, Asim Munir, that the United States could not earn Iran's trust without meeting previously announced conditions. These reportedly included ending all hostilities and unfreezing Iranian assets, dampening expectations of an imminent diplomatic breakthrough.

Adding to uncertainty, Iran's First Vice President said the country had no choice but to exercise sovereignty over the Strait of Hormuz. The statement heightened concerns about potential disruptions to crude oil supplies and helped oil prices rebound sharply from their weekly lows.

The renewed oil price recovery comes after hotter-than-expected US inflation data released last week, strengthening market expectations of another Federal Reserve rate hike. According to the CME Group FedWatch Tool, traders are pricing in a probability of more than 90% that the US central bank will raise borrowing costs again in December.

Meanwhile, persistent uncertainty surrounding the Middle East crisis is providing some support for the US Dollar as a safe-haven asset. This has become another headwind for gold, contributing to its fourth consecutive day of losses and increasing the risk of a deeper correction.

Fed Outlook: October Hold, December Hike

Analysts at BNY Markets reiterated that they do not expect a rate hike at the Fed's upcoming October meeting, noting that market expectations are broadly aligned with this view. They added that markets are currently pricing in only a 17% probability of a rate increase at the next Federal Open Market Committee (FOMC) meeting.

Instead, BNY considers December the most likely opportunity for the next federal funds rate increase and expects it to be the final hike in the current tightening cycle.

Looking further along the policy curve, BNY noted that the implied federal funds rate for December 2027 is now just 4.64%, suggesting slightly less than 75 basis points of additional tightening. These expectations are also somewhat below the most hawkish levels seen several weeks ago.

Nevertheless, investors may remain cautious about taking aggressive directional positions until clearer signals emerge regarding the Fed's policy trajectory.

Market attention will therefore focus on the two-day FOMC policy meeting scheduled for October 28–29 and the US Personal Consumption Expenditures (PCE) Price Index due on October 29. The PCE index is the Fed's preferred inflation gauge and could provide further clues about the outlook for interest rates.

Monetary policy decisions from other major central banks next week, including the Reserve Bank of New Zealand (RBNZ), Bank of Canada (BoC), European Central Bank (ECB), and Bank of Japan (BoJ), may also influence market sentiment toward non-yielding gold.

Overall, the combination of elevated oil prices, persistent inflation concerns, a potentially hawkish Federal Reserve, and a modestly stronger US Dollar continues to favor gold sellers. Unless XAU/USD breaks decisively above the $4,175 resistance zone, the near-term path of least resistance remains to the downside.

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