Gold Breaks Below

 

Gold prices fell below the psychological $3,900 level during the first half of the European trading session on Tuesday, approaching their lowest level since October 2025, which was recorded last week. Expectations of further monetary tightening by the US Federal Reserve (Fed) continued to weigh on the precious metal, offsetting the weakness in the US Dollar ahead of the US midterm elections.

Data released on Monday showed that US manufacturing business activity expanded for the tenth consecutive month in October. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose to 55.5 from 54.5 in September, exceeding market expectations and reinforcing concerns that the US economy remains resilient.

The stronger-than-expected manufacturing data strengthened expectations that the Fed could maintain a hawkish monetary policy stance for longer, increasing pressure on non-yielding assets such as Gold.

Gold Technical Outlook

The XAU/USD pair maintains a short-term bearish bias, trading below the 100-period Exponential Moving Average (EMA) on the four-hour chart. Furthermore, the overnight rejection near the late-October swing low, followed by renewed selling pressure, reinforces the negative technical outlook despite the slightly positive Moving Average Convergence Divergence (MACD) indicator.

Meanwhile, the Relative Strength Index (RSI) is hovering near 40.0, suggesting that the recent recovery from oversold conditions remains tentative and lacks sufficient bullish momentum.

On the downside, sellers are likely to target Friday's swing low around the $3,870 area. A decisive break below this level could open the door to further losses and extend the prevailing bearish trend.

On the upside, immediate resistance is located at the 100-period EMA near $4,053. A sustained move above this level would be necessary to ease the current selling pressure and create room for a more meaningful recovery.

US Midterm Elections and Iran War

Despite the bearish outlook for Gold, the US Dollar continues to struggle to attract strong buying interest as traders remain cautious ahead of the US midterm elections, which will determine control of Congress.

Prediction markets currently favor Democrats to gain control of both the House of Representatives and the Senate. Conversely, a Republican victory in both chambers would represent a major surprise for financial markets, potentially triggering higher US Treasury yields and strengthening the US Dollar.

Meanwhile, growing hopes for a diplomatic resolution to the US-Iran conflict could further discourage aggressive bullish positioning in the Greenback.

US President Donald Trump said on Monday that Iran wanted to reach an agreement to end the war and that a deal could potentially be achieved. Iranian Foreign Minister Abbas Araqchi also stated that consultations through mediators were progressing intensively.

However, several days of negotiations between Iranian officials and Qatari mediators failed to produce a breakthrough. This came despite Tehran revising its proposal to temporarily reopen the strategically important Strait of Hormuz for two days, subject to Washington meeting a series of conditions.

At the same time, renewed tensions between Russia and Ukraine continue to keep geopolitical risk premiums elevated. This development could provide underlying support for the US Dollar, suggesting that Gold remains vulnerable to further downside pressure.

JOLTS and NFP in Focus

On the economic calendar, traders will monitor the upcoming release of US JOLTS Job Openings data during the North American session for fresh trading signals.

However, the main market focus will remain on Friday's highly anticipated US monthly employment report, particularly the Nonfarm Payrolls (NFP) data.

The employment figures could provide important clues about the strength of the US labor market and influence expectations surrounding the Federal Reserve's next monetary policy decisions.

For Gold traders, the combination of US economic data, interest rate expectations, geopolitical developments, and the outcome of the US midterm elections will remain crucial factors in determining the precious metal's next direction.

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Gold Price Today

Gold prices trimmed part of their modest intraday gains on Monday, trading with a slight positive bias below the psychological $3,900 level during the early European session. The US Dollar (USD) attracted fresh selling pressure amid optimism over a potential diplomatic breakthrough to end the US-Iran war, providing some support for the precious metal. However, persistent expectations of further Federal Reserve (Fed) interest rate hikes, fueled by energy-driven inflation concerns, continued to weigh on non-yielding Gold, keeping prices near their lowest level since October 2025, reached on Friday.

Friday's decisive break and close below the key $4,000 psychological threshold triggered additional selling pressure. Furthermore, Gold remains well below the 100-period Exponential Moving Average (EMA) on the four-hour chart, reinforcing the bearish short-term outlook.

The Moving Average Convergence Divergence (MACD) indicator remains in negative territory, with the MACD line below the signal line and the histogram showing limited momentum. Meanwhile, the Relative Strength Index (RSI) stands at 28.94, indicating oversold conditions. This suggests that although selling pressure remains dominant, the latest decline may have become excessive in the short term, potentially leaving room for a technical rebound.

Nevertheless, any further recovery in Gold prices could attract fresh sellers. The 100-period EMA at $4,068.55 represents a key resistance level that buyers must reclaim to ease the current bearish bias. On the downside, traders are closely watching Friday's swing low near $3,870 as a potential demand zone. A decisive break below this support could accelerate the established downward trend and expose Gold to further losses.

US-Iran Diplomacy Supports Gold, but Risks Remain

Iranian negotiators reportedly held discussions with Qatari mediators for the third consecutive day on Sunday in an effort to advance an agreement to end the US-Israeli war against Iran.

In a related development, Iran proposed a 48-hour plan to reopen the Strait of Hormuz, subject to Washington meeting several conditions. These reportedly include lifting sanctions imposed following the Islamabad memorandum and reducing the US military presence in the region.

US President Donald Trump also stated that negotiations with Iran were progressing well and suggested that Tehran wanted to reach an agreement.

However, Trump did not rule out further military action after the November 3 midterm elections. Meanwhile, Iran's Supreme Leader Mojtaba Khamenei reportedly instructed senior military commanders to prepare for a potential renewed confrontation with the United States and Israel while expanding Tehran's retaliation options.

These developments, combined with fresh Ukrainian attacks on Russian oil refineries, have kept geopolitical risk premiums elevated. Uncertainty surrounding the Middle East continues to influence market sentiment and leaves the US Dollar vulnerable to further selling pressure.

Although a weaker dollar can support Gold by making the metal cheaper for holders of other currencies, persistent geopolitical uncertainty complicates the outlook. Consequently, traders should remain cautious before assuming that Gold can sustain a meaningful recovery.

Fed Rate Hike Bets Limit Gold Recovery

Meanwhile, US macroeconomic data released last Thursday pointed to resilient economic growth and persistent price pressures, strengthening expectations of further monetary tightening by the Federal Reserve.

According to the CME Group FedWatch Tool, traders are currently pricing in approximately a 75% probability that the US central bank will raise borrowing costs again in December.

Higher interest rates generally weigh on Gold because the non-yielding metal becomes less attractive compared with interest-bearing assets. This dynamic could limit the upside potential for XAU/USD, even as a weaker US Dollar provides some near-term support.

Against this backdrop, Gold needs strong follow-through buying to establish a sustainable short-term bottom. Without a convincing recovery, the precious metal remains vulnerable to renewed selling pressure.

Key US Economic Data in Focus

Market participants are now turning their attention to several important US economic releases scheduled for the beginning of November.

The US ISM Manufacturing Purchasing Managers' Index (PMI) is due later on Monday, followed by the ISM Services PMI on Wednesday. Investors will then focus on Friday's closely watched US Nonfarm Payrolls (NFP) report for fresh clues about labor market conditions and the Federal Reserve's next policy move.

Stronger-than-expected economic data could reinforce expectations of another Fed rate hike, potentially supporting the US Dollar and placing additional pressure on Gold prices. Conversely, weaker figures could ease monetary tightening concerns and provide the precious metal with room to recover.

Overall, the combination of elevated interest rate expectations, geopolitical uncertainty, and bearish technical indicators suggests that Gold's recovery attempts may attract renewed selling interest. Unless buyers reclaim key resistance levels, the short-term outlook for Gold remains bearish, with the $3,870 area emerging as an important support zone to watch.

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Gold Price Today

 

Gold prices (XAU/USD) remained under pressure on Friday, falling to around $3,965 during the Asian trading session, their lowest level since July. The precious metal struggled to gain support despite a broader risk-off sentiment in financial markets, as expectations of further Federal Reserve (Fed) rate hikes continued to dominate price action. As a result, gold was on track to end the month in negative territory. At the time of writing, XAU/USD was trading near $3,979, down almost 1% on the day.

Gold continued to decline within a well-defined descending parallel channel, reinforcing its bearish short-term outlook. The precious metal was also trading below the 100-period Exponential Moving Average (EMA) on the four-hour chart, strengthening the negative technical structure. This moving average is likely to act as dynamic resistance. Meanwhile, momentum indicators continued to signal selling pressure, with the Relative Strength Index (RSI) hovering around 35 and the Moving Average Convergence Divergence (MACD) remaining in negative territory. These signals suggest that sellers remain in control, while any recovery could face resistance at nearby levels.

Gold Price Forecast: Key Support Levels

On the downside, a sustained break below the previous monthly swing low near $3,975 could expose the next significant support level at the lower boundary of the descending parallel channel, around $3,946. A decisive move below this channel floor would provide a fresh bearish signal and potentially open the door to further losses in the coming trading sessions.

On the upside, any recovery attempt is likely to encounter initial resistance in the $4,025–$4,030 horizontal zone. A break above this area could trigger short-covering activity and lift gold toward the 100-period EMA near $4,093. Further gains could bring the upper boundary of the descending channel into focus around $4,126. This broader resistance zone would need to be reclaimed to ease the prevailing bearish pressure.

Strong US Growth Fuels Fed Rate Concerns

Preliminary estimates showed that US Gross Domestic Product (GDP) expanded at an annualized rate of 3.4% in the third quarter, accelerating from 2.2% in the previous quarter and exceeding the consensus forecast of 3.2%.

Meanwhile, the US Department of Commerce reported that the Personal Consumption Expenditures (PCE) Price Index rose 0.5% in September and increased 3.6% year over year. Core PCE inflation, which excludes volatile food and energy prices, advanced 0.3% month over month and 3.1% annually.

The stronger economic growth and persistent inflation pressures reinforced concerns that the Federal Reserve could maintain a restrictive monetary policy or consider further tightening. These expectations continued to weigh on gold, which typically faces headwinds when interest rates remain elevated because the non-yielding asset becomes less attractive relative to interest-bearing investments.

Treasury Yields Fall as Safe-Haven Demand Returns

Meanwhile, US Treasury yields declined as investors moved into government bonds following disappointing technology sector earnings. The results raised concerns that substantial investments in artificial intelligence (AI) might not generate sufficient returns, prompting a shift toward safer assets.

At the same time, renewed hopes for a diplomatic resolution to the Middle East conflict pushed the US Dollar (USD) lower for a third consecutive day. However, the weaker dollar provided only limited relief for gold as bearish momentum remained firmly in place.

In the latest developments, US Vice President JD Vance reportedly sent a letter directly to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, in an effort to restart peace negotiations. Qatar also submitted a new draft agreement to Iran aimed at ending the war involving the United States and Israel.

These diplomatic initiatives raised hopes of easing regional tensions. Nevertheless, uncertainty surrounding the negotiations continued to limit the improvement in market sentiment.

Middle East Tensions Keep Oil Risks Elevated

Investors remained cautious amid rising hostility between Iran-backed Houthi forces in Yemen and Saudi Arabia. Meanwhile, threats by the United States and Israel to resume military strikes after the US midterm elections kept geopolitical risk premiums elevated.

Adding to supply concerns, Iran's navy claimed on Thursday that four oil tankers had struck naval mines in the Strait of Hormuz. The report intensified fears of potential disruptions to global energy supplies and supported oil prices.

Higher oil prices could add to inflationary pressures, potentially reinforcing expectations that the Federal Reserve will keep monetary policy restrictive for longer. This scenario could continue to limit gold's recovery potential, even as geopolitical uncertainty typically supports demand for safe-haven assets.

The combination of persistent inflation, expectations of tighter Fed policy, and elevated geopolitical risks suggests that gold could remain vulnerable to further selling. Despite the weaker US dollar and declining Treasury yields, market conditions indicate that any rebound in XAU/USD may attract renewed selling interest.

Gold prices were also on track to record a monthly loss of approximately 3.5%, highlighting the persistent bearish pressure surrounding the precious metal.

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