Gold Prices Consolidate

Gold prices remained under bearish pressure during Tuesday's European trading session, as the XAU/USD pair struggled to regain momentum amid broad-based US Dollar strength. Sellers continued to target the psychological $4,000 level, raising the risk of further losses. However, gold held above Monday's three-month low as investors adopted a cautious stance ahead of the Federal Open Market Committee (FOMC) policy decision scheduled for Wednesday.

Market sentiment remains driven by expectations for US interest rates, movements in Treasury yields, and escalating geopolitical tensions in the Middle East. With several key events approaching, traders are reluctant to establish aggressive positions, leaving gold prices vulnerable to further volatility.

Gold Price Forecast: XAU/USD Faces Bearish Pressure

The short-term technical outlook for gold remains bearish after prices broke below a narrow consolidation range. On the four-hour chart, XAU/USD continues to trade well below the 200-period Simple Moving Average (SMA) at $4,198.08, highlighting the prevailing downside bias.

Momentum indicators show some signs of stabilization. The Moving Average Convergence Divergence (MACD) line remains above zero and is moving higher, while the Relative Strength Index (RSI) has recovered into the mid-30s after previously entering oversold territory.

Despite these improvements, the indicators point to a potential corrective rebound rather than a confirmed bullish reversal. Gold would need to reclaim key resistance levels to signal a meaningful shift in market momentum.

On the downside, a sustained break below $4,000 could reinforce bearish sentiment and expose gold to further losses. On the upside, initial resistance is located between $4,065 and $4,075, near the former consolidation range.

The next important resistance level stands at $4,100. A decisive breakout above this barrier could allow XAU/USD to challenge the 200-period SMA before targeting the psychological $4,200 level. Sustained gains above these thresholds would weaken the bearish outlook and improve the prospects for a broader recovery.

Federal Reserve Outlook Weighs on Gold

Federal Reserve officials have recently indicated that there is no immediate urgency to raise interest rates. Nevertheless, markets continue to price in a probability of more than 80% that the US central bank will increase borrowing costs again at its December policy meeting.

Persistent inflation concerns, particularly those linked to elevated energy prices, continue to support expectations of tighter monetary policy. As a result, investors are closely watching the FOMC statement and remarks from Fed Chair Kevin Warsh during the post-meeting press conference, especially in the absence of updated economic projections.

Upcoming US economic releases, including the preliminary third-quarter Gross Domestic Product (GDP) report and the Personal Consumption Expenditures (PCE) Price Index, could provide further insight into the Federal Reserve's policy outlook.

These developments are likely to influence the US Dollar and Treasury yields, two major drivers of gold prices. A recent rebound in US Treasury yields, following their decline to three-week lows, has helped support the greenback ahead of the Fed announcement.

Because gold does not generate interest income, higher yields and expectations of tighter monetary policy can reduce its appeal relative to interest-bearing assets. This dynamic continues to limit the precious metal's recovery potential.

Middle East Tensions Boost US Dollar Demand

Geopolitical uncertainty in the Middle East is adding further pressure to gold prices by supporting demand for the US Dollar as a safe-haven asset.

US-Iran negotiations remain stalled, while renewed attacks by Iran-aligned Houthi forces against Saudi Arabia have heightened concerns about regional stability.

On Monday, the Houthis claimed responsibility for attacks targeting Saudi Arabia's East-West crude oil pumping station and Riyadh airport. Meanwhile, Lebanon's Hezbollah was reportedly preparing for a possible resumption of hostilities with Israel, reducing hopes for an immediate de-escalation of regional tensions.

These developments could sustain demand for the US Dollar and limit gains in gold, even as geopolitical uncertainty traditionally supports safe-haven demand for precious metals.

The impact of the conflict on gold will also depend on its influence on oil prices, inflation expectations, and the Federal Reserve's policy decisions. Any renewed increase in energy prices could intensify inflation concerns and strengthen expectations for higher interest rates, creating additional headwinds for gold.

Gold Prices Await FOMC Decision

Gold prices remain caught between persistent geopolitical risks and macroeconomic pressures favoring the US Dollar. While uncertainty in the Middle East may encourage defensive positioning, elevated Treasury yields and expectations of tighter Federal Reserve policy continue to weigh on the non-yielding precious metal.

The $4,000 psychological level remains a critical support area. A sustained break below this threshold could reinforce the bearish trend, while a recovery above $4,100 would improve the short-term technical outlook. Further gains toward $4,198 and $4,200 could signal a stronger recovery if buying momentum strengthens.

For now, traders are likely to remain cautious ahead of the FOMC announcement and upcoming US economic data. The Federal Reserve's guidance, Treasury yield movements, US Dollar strength, and developments in the Middle East will be key factors in determining gold's next significant move.

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Gold Faces Pressure

Gold prices (XAU/USD) struggled to extend their recovery on Monday, trading modestly higher above the key psychological level of $4,000 during the early European session. However, the lack of strong buying momentum suggests that investors remain cautious about a sustained rebound from the precious metal's three-month low.

Recent comments from Federal Reserve (Fed) officials indicate that there is no immediate need to raise interest rates. Nevertheless, markets continue to price in approximately an 80% probability of a US rate hike by the end of the year. At the same time, rising geopolitical tensions have strengthened demand for the safe-haven US Dollar (USD), creating additional downward pressure on gold prices.

Gold Technical Analysis: Bearish Momentum Persists

Gold maintains a bearish short-term outlook after breaking below the key trading range support near $4,100 last week. Repeated failures to move above the 100-period Exponential Moving Average (EMA) further reinforce the negative technical outlook, suggesting that the recent recovery may represent a temporary correction within the broader downtrend.

Any further recovery could encounter selling pressure near $4,100, which has now turned from support into resistance. The next significant technical barrier stands at the 100-period EMA around $4,135.95.

A sustained break above this moving average would improve the short-term outlook for XAU/USD and potentially open the door for a recovery toward the $4,200 level.

Conversely, failure to overcome these resistance levels could leave gold vulnerable to renewed selling pressure, particularly if the US Dollar strengthens further.

Strong US PMI Data Fuels Inflation Concerns

Recent US economic data has reinforced concerns that inflation could remain elevated, potentially limiting the Federal Reserve's ability to ease monetary policy.

The preliminary S&P Global US Manufacturing Purchasing Managers' Index (PMI) climbed to 56.0 in October, marking its highest reading in 53 months and surpassing market expectations of 55.6.

Meanwhile, the Services PMI came in at 57.9, in line with forecasts but below September's reading of 58.8. The Composite Output Index also declined to 57.6 from the previous month's five-year high of 58.4.

Further details revealed that the output price index increased to 59.8, its highest level since August 2022. This suggests that inflationary pressures may intensify and remain persistent over the coming months.

The combination of resilient economic activity and rising price pressures could encourage the Fed to maintain a restrictive monetary stance for longer. Such expectations generally weigh on gold because the precious metal does not generate interest income.

Iran Tensions and Higher Oil Prices Support the US Dollar

Rising crude oil prices have added another challenge for gold, with oil reaching its highest level since September 16 amid concerns about potential supply disruptions following attacks in Saudi Arabia and escalating tensions involving Iran.

On Sunday, Iran-backed Houthi forces in Yemen reportedly vowed to continue attacking King Khalid International Airport in Riyadh, Saudi Arabia. Meanwhile, stalled negotiations between Washington and Tehran have kept geopolitical uncertainty elevated.

These developments have supported safe-haven demand for the US Dollar, limiting the currency's downside potential and reducing the appeal of aggressive bullish positions in gold.

Higher energy prices could also intensify inflation concerns, increasing the possibility that the Federal Reserve will maintain higher interest rates for longer. This combination of a stronger US Dollar, elevated inflation risks, and restrictive monetary policy could continue to constrain gold's recovery.

Investors may also avoid taking large positions ahead of several major central bank decisions and important US economic releases scheduled for this week.

FOMC Meeting and US Economic Data in Focus

The Federal Open Market Committee (FOMC) meeting is expected to be the main market catalyst this week, with the two-day policy meeting scheduled to conclude on Wednesday.

Without updated economic projections, investors will closely examine the Fed's policy statement and comments from Fed Chair Kevin Warsh during the post-meeting press conference. These communications could provide important clues about the central bank's future policy direction and influence the US Dollar's short-term performance.

Market participants will also monitor the preliminary US third-quarter Gross Domestic Product (GDP) report and the Personal Consumption Expenditures (PCE) Price Index, both scheduled for release on Thursday.

The PCE report is particularly important because it serves as the Federal Reserve's preferred measure of inflation. Stronger-than-expected figures could reinforce expectations of tighter monetary policy, potentially weighing further on gold prices. Conversely, softer inflation data could ease pressure on the precious metal by reducing expectations of additional rate hikes.

In addition, the Reserve Bank of New Zealand (RBNZ), the European Central Bank (ECB), and the Bank of Japan (BoJ) are scheduled to announce their interest rate decisions this week. These events could increase volatility across global financial markets and influence demand for gold and the US Dollar.

Gold Price Outlook: Recovery Remains Vulnerable

Gold prices continue to face significant technical and fundamental challenges despite recovering above the psychological $4,000 threshold.

The recent break below $4,100, resistance from the 100-period EMA, persistent inflation concerns, and strong safe-haven demand for the US Dollar all point to continued downside risks for XAU/USD.

From a technical perspective, gold needs to reclaim the $4,100 level and break above the 100-period EMA near $4,135.95 to strengthen its recovery prospects. A successful move above these barriers could pave the way for a potential advance toward $4,200.

However, if gold fails to maintain momentum above $4,000, selling pressure could return and expose the market to further losses.

With the upcoming FOMC decision, US GDP figures, and PCE inflation data likely to shape interest rate expectations, traders should remain cautious before concluding that gold has established a sustainable market bottom.

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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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Gold Prices Slide

 

Gold prices declined toward $4,120 during European trading on Tuesday as recovering US Treasury yields and rising oil prices weighed on the precious metal. Investors are also monitoring upcoming third-quarter earnings reports from major US technology companies, including Meta Platforms, amid growing concerns about AI-related capital spending and its implications for economic growth.

Gold Price Forecast: XAU/USD Faces Bearish Pressure

Spot gold (XAU/USD) traded near $4,120, maintaining a short-term bearish bias as prices remained below the 20-day Exponential Moving Average (EMA) at $4,186.57. The precious metal has retreated from recent highs and is struggling to regain this key technical level, suggesting that selling pressure continues to limit its recovery.

The Relative Strength Index (RSI) stood at 43.66, below the neutral 50 mark. This indicates that bearish momentum remains in place, although gold has not yet entered oversold territory.

On the upside, the 20-day EMA at $4,186.57 represents the nearest resistance. A daily close above this level would help ease downward pressure and potentially open the door for a more sustained recovery toward $4,300.

On the downside, the psychological $4,000 level remains a major support area for gold. A break below this threshold could expose the precious metal to further losses.

US Treasury Yields Recover Ahead of Meta Earnings

The US third-quarter earnings season is underway, with Meta Platforms among the major technology companies scheduled to report its results on Wednesday. Microsoft, Amazon, and Alphabet are expected to release their quarterly earnings next week.

According to Goldman Sachs, Meta is among five major AI hyperscalers expected to increase their combined capital expenditure to approximately $1.2 trillion next year, Reuters reported.

Such substantial investment could support economic growth and make growth-oriented assets more attractive to investors compared with traditional alternatives. However, concerns about the sustainability of AI infrastructure spending have recently weighed on market sentiment and influenced US Treasury yields.

Deutsche Bank analysts noted that growing concerns about AI-related economic growth had triggered a significant flight to safety in fixed-income markets. This shift helped support government bonds as investors reassessed the economic outlook.

The bank highlighted that the 10-year US Treasury yield fell 16.5 basis points last week, reaching 5.07% before edging up 1.5 basis points on Friday. The recent movements reflect changing investor expectations regarding economic growth and the outlook for financial markets.

Although Treasury yields showed signs of recovery on Monday, the 10-year yield was reported down 0.35% near 5.13% at the time of writing. Higher yields can weigh on gold because the precious metal does not offer interest income.

Oil Prices Rise on Middle East Risks

Oil prices have climbed nearly 15% over the past two weeks from a recent low of $86.32. West Texas Intermediate (WTI) crude was trading slightly higher near $98.45 at the time of writing.

Persistent tensions in the Middle East have prompted investors to maintain a substantial geopolitical risk premium in oil prices. Reports that Iran could expand the scope of a potential blockade to include the Bab el-Mandeb Strait and the Suez Canal have raised concerns about disruptions to global energy supplies.

Additional concerns emerged after Mohsen Rezaei, a member of Iran's political and security establishment, warned over the weekend that Tehran had prepared new retaliatory plans in the event of further US-Israeli attacks.

Higher oil prices could complicate the inflation outlook by increasing energy costs. This could also influence Federal Reserve policy expectations and indirectly affect gold prices through changes in Treasury yields and the US dollar.

Federal Reserve Enters Blackout Period

The Federal Reserve has entered its blackout period ahead of its upcoming monetary policy announcement. During this period, Fed officials generally refrain from public comments on monetary policy.

Recent remarks from several policymakers have emphasized the importance of bringing inflation back to the central bank's 2% target. However, officials have not indicated an urgent need for another interest rate increase.

Meanwhile, the CME FedWatch Tool suggests that market participants expect the Fed to leave interest rates unchanged in October, while pricing in the possibility of a rate hike in December.

The combination of Treasury yield movements, oil price volatility, geopolitical tensions, and changing Fed expectations is likely to remain central to gold's near-term direction.

For now, XAU/USD faces a bearish technical outlook while trading below $4,186.57. A sustained break above this resistance could support a recovery toward $4,300, whereas the $4,000 psychological level remains the key downside support to watch.

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Gold Remains Supported

Gold prices held onto their recent gains but struggled to break above the $4,200 psychological level during Monday’s European trading session. Federal Reserve Chair Kevin Warsh’s cautious comments on future monetary policy reduced market expectations for an October interest rate hike. Meanwhile, declining US Treasury yields after retreating from multi-year highs continued to support the non-yielding precious metal.

Despite the recent recovery, gold’s broader technical outlook remains cautious. XAU/USD is still trading below the 200-period Simple Moving Average (SMA) on the four-hour chart, suggesting that the latest rebound represents a corrective recovery within a broader bearish structure rather than the beginning of a confirmed uptrend.

The Relative Strength Index (RSI) stands at 55.1, indicating a modest bullish bias. The Moving Average Convergence Divergence (MACD) also remains in positive territory, although its momentum has weakened slightly. To strengthen the bullish outlook, gold needs to reclaim the $4,200 level and break above the $4,215–$4,220 resistance zone. A sustained move beyond this range could ease selling pressure and improve the medium-term outlook.

On the downside, immediate support is located around $4,150–$4,145, followed by the psychological $4,100 level. Further support lies near last week’s swing low at $4,075–$4,065. A decisive break below this area could expose gold to additional losses, potentially bringing the July year-to-date low near $3,957 back into focus.

Fed Outlook Shifts Gold Prices

Deutsche Bank strategists highlighted the importance of the Federal Reserve’s upcoming blackout period ahead of its October 27–28 policy meeting. Warsh refrained from challenging market expectations for interest rates, stressing that he would not prejudge the outcome of the upcoming meeting despite hotter-than-expected US inflation data released last week.

Markets interpreted Warsh’s relatively restrained tone as a positive surprise. According to Deutsche Bank, the probability of an October rate hike declined to approximately 15%, down from around 30% when he spoke. Equity futures also strengthened, with S&P 500 and Nasdaq futures each rising 0.15% after spending much of the session in negative territory. Stoxx futures advanced 0.68%.

However, uncertainty surrounding the Federal Reserve’s policy outlook continues to limit gold’s upside potential. Although expectations for an October rate hike have eased, traders remain concerned that persistent inflation could force the central bank to maintain a restrictive monetary stance.

According to the CME Group FedWatch Tool, markets are pricing in a probability of more than 90% that the Federal Reserve will raise interest rates in December. This outlook reflects growing concerns that inflationary pressures could remain elevated for longer than previously anticipated.

Energy prices are another key factor influencing expectations for future monetary policy. Crude oil climbed to its highest level in nearly a month on Friday as escalating geopolitical tensions in the Middle East and Eastern Europe heightened concerns about global energy supplies.

Geopolitical Risks Support Gold

Geopolitical developments continue to influence financial markets and commodity prices. Over the weekend, three tankers were reportedly damaged in the Strait of Hormuz as Iran’s Islamic Revolutionary Guard Corps (IRGC) navy maintained that the strategic waterway remained closed and that vessels could pass only with its authorization.

In Eastern Europe, Ukrainian attacks sparked fires at an oil export terminal and a storage depot in St. Petersburg on Sunday. Kyiv reportedly launched more than 1,000 drones toward Russia in one of the largest aerial attacks of the ongoing conflict.

Meanwhile, tensions between Saudi Arabia and Iran-backed Houthi rebels in Yemen have shown little sign of easing. Iran’s Supreme National Security Council secretary, Mohsen Rezaei, also warned that Tehran had prepared new retaliation plans should the United States and Israel resume attacks.

These developments have kept geopolitical risk premiums elevated, supporting crude oil prices and contributing to uncertainty across global financial markets. At the same time, shifting demand for safe-haven assets has influenced the US dollar and gold, leaving the precious metal caught between competing market forces.

XAU/USD Faces Key Resistance

Gold has remained within a relatively narrow trading range for more than three weeks as declining US Treasury yields and geopolitical uncertainty provide support, while expectations of tighter Federal Reserve policy continue to weigh on the market.

In the near term, the $4,200 level remains a crucial psychological threshold for XAU/USD. A sustained breakout above $4,220 could strengthen the recovery and improve the technical outlook. Conversely, a break below $4,065 would increase the risk of further losses, with the July low near $3,957 emerging as a potential downside target.

For now, traders may remain cautious while waiting for a clear breakout from the current range. Stronger buying momentum above resistance or renewed selling pressure below support could determine gold’s next directional move as markets assess the Federal Reserve’s policy outlook, Treasury yields, inflation risks, and ongoing geopolitical tensions.

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Gold Prices Near $4,200

 

Gold prices extended their gains for a second consecutive session on Friday, trading near $4,180 as buyers set their sights on the $4,230 area, the upper boundary of October’s trading range. The precious metal has benefited from declining US Treasury yields and dovish comments from Federal Reserve officials this week, which have weakened support for the US dollar.

XAU/USD Maintains Bullish Momentum

XAU/USD traded at $4,179, maintaining a short-term bullish bias as buyers targeted the upper end of the three-week horizontal trading range near $4,230. Technical indicators on the four-hour chart continued to support the positive outlook.

The Relative Strength Index (RSI) stood near 57 in positive territory, while the Moving Average Convergence Divergence (MACD) remained firmly above the zero line, signaling moderate upward momentum.

Gold faces initial resistance at the psychological $4,200 level, followed by the key $4,230 resistance, which marks the October 2 high. A decisive break above this level could confirm a bullish reversal and open the way toward the September 25 high near $4,315.

On the downside, initial support lies around the intraday low near $4,150, followed by the lower boundary of the trading range at approximately $4,070. A bearish break below these levels would invalidate the short-term bullish outlook and expose gold to further losses toward the psychological $4,000 level, near the late-July and early-August lows.

US Economic Data Fails to Lift Dollar

US economic data released on Thursday showed that the Producer Price Index (PPI) rose faster than expected in September, following a stronger-than-anticipated consumer inflation report released a day earlier. Retail sales also demonstrated unexpected resilience despite rising prices.

However, the data failed to provide meaningful support for the US dollar, as market expectations for a Federal Reserve interest rate hike in October remained subdued.

Several Fed officials indicated that the central bank was likely to keep interest rates unchanged at its next meeting while awaiting further evidence of the economic impact of September’s rate increase.

Warsh Offers No Fresh Policy Signals

Federal Reserve Chair Kevin Warsh spoke at an International Monetary Fund (IMF) forum in Bangkok early Friday. He praised the resilience of the US economy and reaffirmed the central bank’s commitment to combating inflation.

However, Warsh offered no new signals regarding the Fed’s near-term monetary policy direction, leaving investors focused on incoming economic data and further comments from central bank officials.

With US Treasury yields declining and expectations for another immediate rate hike remaining limited, gold could retain its short-term bullish momentum. Nevertheless, the $4,200–$4,230 resistance zone remains critical in determining whether XAU/USD can extend its recovery toward $4,315.

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Gold Rebounds Strongly

 

Gold prices staged a strong recovery from weekly lows, climbing back above the $4,150 level during early trading on Thursday. The US Dollar (USD) and US Treasury yields retreated further from their post-CPI highs following reports of Chinese bond purchases. However, the bearish daily Relative Strength Index (RSI) continues to pose a challenge for bullish momentum.

XAU/USD Technical Analysis

XAU/USD has traded within a $4,100–$4,200 range since the beginning of October, while remaining below the 50-day, 100-day, and 200-day Simple Moving Averages (SMAs) on the daily chart.

Momentum indicators point to continued consolidation. The Relative Strength Index (RSI) is hovering around 42, remaining below the neutral 50 level and suggesting that bearish momentum still dominates. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has turned slightly positive, signaling that the market has yet to establish a clear directional trend.

On the upside, initial resistance stands at the psychological $4,200 level, followed by the 100-day SMA at $4,249 and the 50-day SMA at $4,337. A sustained recovery could encounter further resistance near $4,400 before bringing the 200-day SMA at $4,525 into focus.

On the downside, initial support is located at $4,100. A sustained break below this level could expose the $4,000–$3,950 support zone, potentially extending the broader bearish trend.

Strong US Inflation Pressures Gold

Gold (XAU/USD) extended its intraday losses on Wednesday after stronger-than-expected US inflation data boosted the US Dollar and Treasury yields. At the time of reporting, XAU/USD was trading near $4,095, down 1.57% on the day.

The US Consumer Price Index (CPI) rose by 0.6% month-over-month in September, matching expectations and accelerating from August's 0.4% increase. Annual headline inflation climbed to 3.7% from 3.4%, exceeding the market forecast of 3.6%.

Core CPI, which excludes food and energy prices, increased by 0.3% month-over-month, above expectations of 0.2% and matching the previous month's pace. Annual core inflation accelerated to 2.6% from 2.4%, also surpassing the forecast of 2.5%.

Following the release, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, rose to approximately 102.67, its highest level since April 2025. US Treasury yields also rebounded sharply, with the benchmark 10-year yield climbing around 10 basis points to 5.28%.

A stronger US Dollar makes dollar-denominated Gold more expensive for international buyers, while rising Treasury yields increase the opportunity cost of holding the non-yielding precious metal. Both factors typically weigh on Gold prices.

Geopolitical Risks Keep Inflation Elevated

Higher energy prices linked to escalating Middle East tensions remain a key source of inflationary pressure. Persistent threats to oil supplies could keep fuel costs elevated, making it more difficult for inflation to return to the Federal Reserve's 2% target.

Against this backdrop, the Federal Reserve is expected to maintain a restrictive monetary policy stance. Money markets have increased their expectations for additional interest rate hikes through the end of 2027.

Traders are now pricing in a 51% probability of a rate hike at the October 27–28 meeting, up sharply from 22% before the CPI release. The probability of a December rate hike has climbed to nearly 95%, according to the CME FedWatch Tool.

New York Fed President John Williams said on Tuesday that another interest rate increase in 2026 could be appropriate. However, he does not currently anticipate the need for further hikes in 2027 and expects inflation to move toward the central bank's 2% target next year.

Gold Outlook Remains Cautious

Gold's rebound above $4,150 offers some relief after the recent sell-off, particularly as the US Dollar and Treasury yields retreat from their post-CPI highs. Nevertheless, the broader technical outlook remains cautious as XAU/USD continues to trade below its major daily moving averages.

The $4,200 level remains the first major resistance to watch. A decisive break above this threshold could strengthen the recovery, while failure to hold above $4,100 would increase the risk of a deeper decline toward $4,000–$3,950.

For now, Gold traders will continue monitoring US inflation developments, Federal Reserve rate expectations, Treasury yields, and geopolitical risks for fresh directional signals.

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Gold Prices Slide

Gold prices declined on Wednesday as investors evaluated the Federal Reserve’s monetary policy outlook ahead of the latest US Consumer Price Index (CPI) report. Escalating tensions in the Middle East also raised concerns about energy supply disruptions, potentially driving oil prices higher and sustaining inflationary pressures that could keep interest rates elevated.

At 13:51 WIB, spot gold (XAU/USD) fell 0.3% to $4,148.79 per ounce, while US gold futures edged lower to $4,171.75. Spot silver (XAG/USD) dropped 0.9% to $58.6645 per ounce, and platinum (XPT/USD) declined 0.2% to $1,662.06. In contrast, palladium (XPD/USD) gained 0.6% to $1,133.61, while palladium futures advanced 0.5% to $1,132.50. The US Dollar Index slipped 0.1% to 102.12.

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Higher Oil Prices Pressure Gold

Gold extended its losses for a second consecutive session, declining approximately 0.8% as renewed attacks in the Middle East heightened concerns about potential energy supply disruptions and persistent inflation.

Brent crude oil traded above $106 per barrel, increasing the risk that rising energy costs could complicate the inflation outlook and strengthen the case for tighter monetary policy. If inflation remains elevated, the Federal Reserve could face greater challenges in easing financial conditions, potentially limiting gold’s recovery.

Fed Interest Rate Expectations in Focus

Gold generally faces downward pressure when interest rates and bond yields rise because it does not generate interest income. Higher yields increase the opportunity cost of holding non-yielding assets, potentially reducing demand for gold among investors.

Since the US-Iran war erupted in late February, gold has reportedly fallen by approximately 20% from its earlier levels, as concerns about energy-driven inflation and expectations of tighter monetary policy weighed on prices.

The Federal Reserve raised interest rates last month for the first time since 2023, keeping monetary policy firmly in focus. Investors are now awaiting Wednesday’s US CPI report for September to assess the latest inflation trends and gain further insight into the Fed’s potential policy decisions.

Interest rate swaps indicate that markets see a relatively low probability of another rate hike at the October meeting. However, traders are pricing in approximately a 90% chance of an increase in December, reflecting continued concerns about persistent inflation.

Gold Correction Preserves Long-Term Outlook

Rick Kanda, managing director of The Gold Bullion Company, noted that gold’s strong performance following a record-breaking 2025 helped propel prices to an all-time high of approximately $5,560 per ounce in January.

However, prices subsequently retreated to around $4,185 on October 12, falling below several institutional forecasts for year-end levels.

According to Kanda, the recent correction does not necessarily undermine gold’s long-term bullish outlook. Despite the pullback, prices remain historically elevated, while consolidation following a substantial rally does not automatically indicate a deterioration in the metal’s underlying fundamentals.

Looking ahead, gold traders will closely monitor the US CPI report, Federal Reserve interest rate expectations, US Treasury yields, and geopolitical developments in the Middle East. These factors are likely to influence near-term price movements and determine whether gold can regain its upward momentum.

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Gold Buyers Hesitate

 

Gold prices maintained a mildly positive bias on Tuesday but remained capped below the $4,200 level and the upper boundary of a two-week trading range. The US Dollar (USD) retreated from its highest level since April 2025 amid some profit-taking, providing modest support for the precious metal. However, the Federal Reserve’s (Fed) hawkish policy stance and escalating Middle East tensions could limit deeper losses in the safe-haven Dollar, keeping Gold prices under pressure and warranting caution among aggressive bullish traders.

The XAU/USD pair remained confined within a two-week trading range, extending its bearish consolidation following the decline from the August monthly swing high. Furthermore, Gold continued to trade below the 100-period Simple Moving Average (SMA) on the four-hour chart, reinforcing the negative short-term outlook.

The Moving Average Convergence Divergence (MACD) indicator remained slightly in negative territory, suggesting that bullish momentum was losing strength. Meanwhile, the Relative Strength Index (RSI) hovered near 55, indicating a constructive but gradually cooling bullish tone as Gold consolidated below a key resistance barrier.

Consequently, further upside could encounter initial resistance near the 100-period SMA at $4,204. This is followed by the upper boundary of the trading range around $4,218, while the 61.8% Fibonacci retracement level at $4,241 represents the next significant hurdle.

Beyond these levels, a broader supply zone could emerge between the 50.0% Fibonacci retracement at $4,328 and the 38.2% level at $4,415. Additional resistance lies at the 23.6% retracement level of $4,523, followed by the cycle peak near $4,697.

On the downside, immediate support aligns with the 78.6% Fibonacci retracement level at $4,117. A decisive break below this level could trigger renewed selling pressure, exposing the structural floor around the previous swing low of $3,959.

Hawkish Fed Expectations Support the US Dollar

Minutes from the Federal Open Market Committee (FOMC) meeting held on September 15–16, released last Wednesday, revealed that policymakers considered another quarter-point interest rate increase before the end of 2026 potentially appropriate, as inflation remained above the Fed’s 2% target.

Additionally, hawkish comments from Cleveland Fed President Beth Hammack on Monday reinforced market expectations that the US central bank could raise borrowing costs toward the end of the year. Energy-driven inflation risks have also strengthened the prospect of further monetary tightening, keeping US Treasury yields elevated near multi-year highs.

Hammack’s Hawkish Stance Reinforces Inflation Concerns

Fed official Beth Hammack delivered a notably hawkish message, receiving an FXS Speechtracker score of 8.4 out of 10, well above the historical average of 7.5. The reading highlighted a stronger-than-usual preference for tighter monetary policy.

Her emphasis on maintaining higher interest rates, preserving restrictive financial conditions to bring inflation back to 2%, and preventing inflation expectations from becoming entrenched reinforced the prospect of further tightening.

Hammack also expressed concern that inflationary pressures were becoming more persistent amid broadly neutral financial conditions and demand-driven price pressures, including those associated with artificial intelligence (AI).

Her remarks suggested a preference for relatively prompt and smaller interest rate adjustments, keeping the policy outlook tilted firmly toward further tightening. Such expectations typically provide support for the US Dollar.

Hammack’s focus on explaining the Fed’s policy reaction function, alongside warnings that companies were planning price increases beyond rising costs, reinforced the message that the current inflation trend in the mid-to-upper 2% range remained inconsistent with the central bank’s target.

The FXS Fed Sentiment Index subsequently increased by 0.59 points to 138.92, confirming that Fed communication remained firmly within hawkish territory. The reading stood well above the neutral threshold of 100, indicating that recent central bank commentary was increasingly aligned with expectations for tighter monetary policy.

This policy outlook generally supports the US Dollar against other major currencies and could limit Gold’s recovery, particularly as the precious metal offers no interest income.

Middle East Tensions Limit Gold’s Upside

Meanwhile, Iran-backed Houthi forces in Yemen intensified their campaign against Saudi Arabia, launching additional missiles on Monday. The escalation followed a deadly attack at Riyadh’s King Khalid International Airport over the weekend, prompting Saudi Arabia to threaten retaliation.

US President Donald Trump also raised the possibility of joining military operations against the Houthis and resuming attacks on Iran.

These developments have kept geopolitical risk premiums elevated, supporting demand for the US Dollar as a safe-haven asset. As a result, the geopolitical backdrop could restrict meaningful gains in Gold prices, despite the precious metal’s traditional appeal during periods of uncertainty.

Traders may also prefer to wait for further clarity on the Fed’s monetary policy outlook before establishing fresh directional positions.

Attention is therefore shifting toward the latest US inflation data, with the Consumer Price Index (CPI) scheduled for release on Wednesday and the Producer Price Index (PPI) due on Thursday.

Additionally, Fed Chair Kevin Warsh’s speech at the annual meetings of the International Monetary Fund (IMF) and World Bank in Bangkok on Friday could influence the US Dollar and non-yielding Gold.

Overall, the fundamental backdrop suggests that further Gold advances could attract selling interest, potentially keeping XAU/USD gains limited in the near term.

US CPI Key to Fed Rate Expectations

Analysts at Societe Generale highlighted that the main non-geopolitical event this week would be Wednesday’s US CPI release, describing it as a crucial factor in shaping near-term market expectations for the Federal Reserve.

The analysts noted that an increase in core inflation to 2.5%, in line with market consensus, could leave existing rate expectations largely unchanged.

Under this scenario, a rate increase at the current month’s meeting would remain unlikely, while the probability of a December hike and another increase in the first quarter would remain significant.

Consequently, the upcoming inflation figures could play a decisive role in determining the US Dollar’s next move and whether Gold can break above its current consolidation range or faces renewed selling pressure.

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Gold Buyers Dominate

Gold prices extended their recovery from a two-month low of $4,067 on Monday, with buyers attempting to keep XAU/USD above the $4,200 psychological level as the US Consumer Price Index (CPI) week began. The rebound came as the US Dollar paused its pullback from an 18-month high, while investors assessed inflation risks, elevated Treasury yields, and the Federal Reserve’s monetary policy outlook.

Despite the recent recovery, gold remains vulnerable to further losses as a stronger US Dollar and expectations of tighter monetary policy continue to weigh on market sentiment.

XAU/USD Forecast: Bearish Momentum Persists

Gold’s short-term technical outlook remains bearish, with XAU/USD trading below the 20-day Bollinger Band moving average at $4,239. Nevertheless, prices are holding slightly above the lower Bollinger Band at $4,057 and the key horizontal support level at $4,100.

The Relative Strength Index (RSI) stands at 37, indicating that bearish momentum remains dominant. Meanwhile, the Moving Average Convergence Divergence (MACD) remains in negative territory, reinforcing the current downside bias. However, neither indicator suggests that gold has entered an extreme oversold condition.

On the upside, initial resistance is located at $4,239, followed by the upper Bollinger Band near $4,420. A sustained break above these levels could ease selling pressure and improve the short-term technical outlook for gold.

On the downside, immediate support remains at $4,100, followed by the lower Bollinger Band at $4,057.47. A decisive break below this area could trigger additional selling and expose XAU/USD to deeper losses.

Rising Oil Prices Boost US Dollar

US Treasury yields remained near multi-year highs as rising oil prices intensified concerns about persistent inflation. Growing government debt, fiscal uncertainty, and resilient US economic growth have also contributed to upward pressure on Treasury yields.

West Texas Intermediate (WTI) crude oil prices rose approximately 3% on Thursday following reports that the Pentagon had ordered preparations for potential new military strikes against Iran. According to Axios, military action could occur before the US midterm elections in November.

Strategists at Brown Brothers Harriman highlighted the broader implications of elevated energy prices, noting that sustained increases could push inflation expectations, interest rates, and benchmark bond yields higher. These conditions could also favor energy-exporting currencies and the US Dollar over currencies from energy-importing economies.

The strategists added that the relative strength of the US economy and strong foreign demand for US securities provided further support for the Greenback.

The US Dollar Index (DXY), which tracks the dollar against six major currencies, traded near 102.40, approaching its 18-month high of 102.53 recorded earlier in the week. Expectations of a hawkish Federal Reserve continued to underpin the US currency, creating an additional headwind for gold prices.

Fed Rate Hike Risks Weigh on Gold

Federal Reserve Governor Christopher Waller said on Thursday that further interest rate increases remained necessary, although the pace of tightening could remain flexible. He also warned that inflation was still too high, pointing to AI-related developments and ongoing energy shocks as persistent inflationary pressures.

The Federal Reserve’s September meeting minutes, released on Wednesday, revealed unanimous support for a 25-basis-point rate increase to a target range of 3.75%–4.00%. Most policymakers also considered another rate hike appropriate by the end of the year because of continuing inflation risks.

However, the minutes did not establish a firm commitment to another increase at the October 27–28 meeting. Financial markets broadly anticipated that the Fed would leave interest rates unchanged at that meeting.

A stronger US Dollar, elevated Treasury yields, and the possibility of additional monetary tightening have reduced demand for non-yielding gold. Higher bond yields increase the opportunity cost of holding precious metals, making gold less attractive compared with interest-bearing assets.

Despite these headwinds, longer-term demand from gold exchange-traded funds (ETFs) and central banks continues to provide underlying support for the precious metal.

Central Bank Buying Supports Gold Outlook

TD Securities noted that sustained demand from discretionary traders, ETFs, and central banks continues to provide a solid foundation for gold prices. This underlying demand could help limit further downside during the current market correction.

The firm also suggested that gold could become increasingly decoupled from real interest rates and begin a new upward trend extending into 2027.

For now, the XAU/USD outlook reflects a battle between short-term bearish pressure from the US Dollar and elevated Treasury yields and longer-term support from investment demand and central bank purchases.

The $4,100 level remains a crucial support zone for gold. A sustained move above $4,239 could improve the technical outlook and open the door to a stronger recovery. Conversely, a decisive break below $4,057 could expose XAU/USD to further downside risks.

Investors will closely monitor upcoming US CPI data and developments in Federal Reserve policy expectations for fresh trading signals. Inflation figures, Treasury yield movements, and changes in the US Dollar’s momentum are likely to remain key drivers of gold prices in the near term.

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Gold Holds Firm

 

Gold Holds Near Weekly Highs Around $4,200 as Fed Rate Hike Expectations Cap Upside

Gold (XAU/USD) remained firm on Friday, revisiting the $4,200 level and extending its recovery from a two-month low. A weaker US Dollar, declining oil prices, and easing US Treasury yields provided some support for the precious metal as investors awaited US consumer sentiment data. Although market flows appear to be shifting back in favor of gold, bearish daily technical indicators continue to limit the potential for a stronger recovery.

Gold Price Forecast: XAU/USD Technical Outlook

On the daily chart, XAU/USD maintains a short-term bearish bias as the price remains below the 20-day Bollinger Band Simple Moving Average (SMA) near $4,239. However, gold continues to hold slightly above the lower Bollinger Band at $4,057 and the key horizontal support level at $4,100.

The Relative Strength Index (RSI) stands at 37, remaining in the lower half of its range, while the Moving Average Convergence Divergence (MACD) indicator stays in negative territory. Both indicators suggest that selling pressure remains in place, although gold has not yet reached extreme oversold conditions.

On the upside, initial resistance is located at the 20-day Bollinger Band SMA around $4,239, followed by the upper Bollinger Band near $4,420. A sustained move above these levels would be necessary to ease the current bearish outlook and signal a potential recovery.

On the downside, immediate support remains at $4,100, followed by the lower Bollinger Band at $4,057.47. A decisive break below this support zone could expose gold to further losses and extend the current correction.

US Treasury Yields and Oil Prices Pressure Gold

US Treasury yields remained near multi-year highs, driven primarily by rising oil prices that have intensified concerns about persistent inflation. Growing government debt, fiscal pressures, and the resilience of US economic growth have also contributed to upward pressure on Treasury yields.

Oil prices rebounded on Thursday, with West Texas Intermediate (WTI) crude rising approximately 3% following reports that the Pentagon had ordered preparations for potential new military strikes against Iran. Axios reported that military action could take place before the US midterm elections in November.

Strategists at Brown Brothers Harriman warned that persistently elevated energy prices could increase inflation risks, push policy rates and benchmark bond yields higher, and favor the currencies of energy-exporting countries. These conditions could also support the US Dollar relative to currencies from energy-importing economies.

They also highlighted that the United States' growth advantage and strong foreign demand for US securities provide additional support for the Greenback.

The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, traded around 102.40, remaining close to the 18-month high of 102.53 reached earlier in the week. Expectations of a hawkish Federal Reserve continue to underpin the US Dollar, creating a challenging environment for gold.

Hawkish Fed Outlook Limits Gold's Recovery

Federal Reserve Governor Christopher Waller said on Thursday that further rate increases remain necessary, although the pace of tightening should remain flexible. He also noted that inflation is still too high, citing AI-related developments and ongoing energy shocks among the persistent inflationary pressures.

Minutes from the Federal Reserve's September meeting, released on Wednesday, showed unanimous support for a 25-basis-point rate increase to a target range of 3.75%–4.00%. Most participants also considered another rate increase later in the year potentially appropriate amid persistent inflation risks.

However, the minutes did not commit policymakers to another increase at the October 27–28 meeting. Market participants broadly expect the Fed to keep interest rates unchanged at that meeting while assessing incoming economic data and inflation developments.

A stronger US Dollar, elevated Treasury yields, and expectations of further monetary tightening have kept many gold buyers on the sidelines. Higher yields increase the opportunity cost of holding non-yielding assets such as gold, while a stronger dollar makes the metal more expensive for holders of other currencies.

Despite these headwinds, gold continues to receive underlying support from solid exchange-traded fund (ETF) demand and sustained purchases by central banks.

TD Securities noted that continued demand from discretionary traders, ETFs, and central banks provides a solid foundation for gold prices. The firm also suggested that these structural demand factors could eventually allow gold to become less sensitive to real interest rates and potentially establish a new uptrend extending into 2027.

Gold Price Outlook

Gold's recovery toward $4,200 signals improving short-term price action, but the broader technical outlook remains bearish while XAU/USD trades below the $4,239 resistance level. A sustained break above this threshold could open the way toward $4,420, while failure to hold $4,100 may expose the market to renewed downside pressure toward $4,057.

In the near term, gold's direction will likely depend on US Dollar movements, Treasury yields, energy-driven inflation concerns, and expectations for the Federal Reserve's next policy decisions. Although central bank and ETF demand continue to provide longer-term support, a sustained bullish reversal will require stronger technical confirmation.

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Gold Faces Pressure

Gold Struggles as Rising Yields and Hawkish Fed Signals Weigh

Gold reversed its modest recovery on Thursday as a stronger US Dollar and rising US Treasury yields limited upside momentum, keeping the precious metal in a bearish consolidation phase near its two-month low. At the time of writing, XAU/USD was trading around $4,119, down from the daily high of approximately $4,143.

On the daily chart, XAU/USD maintains a short-term bearish bias, with prices trading below the 20-day Bollinger Band Simple Moving Average (SMA) at $4,239. However, gold remains slightly above the lower Bollinger Band at $4,057 and the key horizontal support at $4,100.

The Relative Strength Index (RSI) stands at 37 and remains in the lower half of its range, while the Moving Average Convergence Divergence (MACD) indicator remains negative. Both indicators point to continued downside pressure, although gold has not yet entered extreme oversold territory.

On the upside, initial resistance is located at the 20-day Bollinger Band SMA near $4,239, followed by the upper Bollinger Band around $4,420. A sustained move above these levels would be needed to ease the current bearish bias.

On the downside, traders are likely to focus on the $4,100 support level, followed by the lower Bollinger Band at $4,057.47. A decisive break below this area could expose gold to deeper losses.

Rising Treasury Yields and Oil Prices Pressure Gold

US Treasury yields remain near multi-year highs, driven in part by a surge in oil prices that has renewed concerns over inflation. Rising government debt, fiscal concerns, and resilient US economic growth are also adding upward pressure to Treasury yields.

Oil prices rebounded on Thursday, with West Texas Intermediate (WTI) crude rising around 3% following reports that the Pentagon had ordered preparations for a possible new strike against Iran. Axios reported that military action could take place before the US midterm elections in November.

Strategists at Brown Brothers Harriman noted that sustained high energy prices increase the risks surrounding inflation, policy rates, and benchmark bond yields. They also argued that the environment could benefit currencies of energy-exporting countries and the US Dollar relative to those of energy-importing nations.

The strategists further highlighted that the relative strength of the US economy and strong foreign demand for US securities are providing additional support for the US Dollar.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, was trading around 102.40, close to its 18-month high of 102.53 reached earlier this week. The Federal Reserve's hawkish outlook continues to provide additional support for the US Dollar.

Hawkish Fed Outlook Limits Gold's Recovery

Federal Reserve Governor Christopher Waller said on Thursday, “More increases are still needed, but I am flexible about the pace.” Waller also noted that inflation remains too high, with AI investment and ongoing energy shocks among the persistent inflationary forces.

The Federal Reserve's September meeting minutes, released on Wednesday, showed unanimous support for a 25-basis-point rate hike to 3.75%-4.00%. Most participants also considered another rate increase appropriate later this year amid persistent inflation risks.

However, the minutes did not commit the Fed to another hike at its October 27–28 meeting, when markets broadly expect interest rates to remain unchanged.

A stronger US Dollar, elevated Treasury yields, and expectations of further Fed tightening have kept gold buyers on the sidelines. Nevertheless, gold's longer-term support remains intact, supported by solid ETF demand and continued purchases by central banks.

TD Securities said sustained demand from discretionary traders, ETFs, and central banks provides a strong foundation for gold. The firm believes the current correction could ultimately be contained by solid underlying demand and that gold may become increasingly decoupled from real interest rates, potentially paving the way for a new uptrend through 2027.

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