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.