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The United States (US) midterm elections, scheduled for November 3, could trigger a major repricing of the US Dollar (USD), Treasury yields, and Gold, but the outcome is not predetermined. With all 435 House seats and 35 Senate seats up for grabs, the vote will serve as a referendum on Donald Trump's presidency, and prediction markets currently price in a roughly 60% chance of a Democratic sweep, about 30% for a divided Congress, and have almost priced out a Republican sweep. Because Congress shapes taxes, spending, government borrowing, and scrutiny of Federal Reserve (Fed) appointments, the result could push long-term yields, and Gold along with them, decisively in either direction. The key Gold levels to watch sit around $4,000 on the downside and $4,500 on the upside.

What the midterms can (and cannot) changeThe US midterm elections take place on November 3. With all 435 House seats and 35 Senate seats up for grabs, the US midterms will serve as a referendum on Donald Trump's presidency, with control of Congress, the cost of living, and the ongoing Iran war dominating voters' concerns. Republicans currently hold narrow majorities in both chambers. Democrats need to gain seats in both chambers to secure control of Congress.

Why does this matter to financial markets? Because Congress has a major role in shaping taxes, spending, healthcare policy, government borrowing, and the legislative agenda. A change in congressional control could make it harder for the White House to pass new legislation. It could also increase scrutiny of the administration's policies and appointments.

But traders need to understand one important distinction: a midterm election changes the balance of political power, not the presidency itself. Even if Democrats gain control of Congress, existing policies would not automatically disappear. A divided government could limit new legislation while leaving the administration with considerable influence over trade, sanctions, and foreign policy.

That means the market reaction may depend less on who wins and more on what investors believe the result means for economic growth, inflation, government debt and the Federal Reserve. The election result alone won't tell us how financial markets would react — what matters is how markets are pricing the three possible outcomes.

Scenario one: The Democratic sweep, the market's base caseCurrently, prediction-market pricing gives a Democratic sweep a probability of approximately 60%, although these odds can change before election day. At first glance, investors might expect this outcome to weaken the US Dollar because it would constrain Trump's legislative agenda. A Democratic-controlled Congress could restrain additional tax cuts and spending without necessarily reversing the administration's existing policies. A Democratic Senate could also increase scrutiny of Fed appointments, potentially limiting the administration's influence over the central bank and easing concerns about its independence.

If markets interpret the outcome as a more restrained fiscal path, Treasury yields could face some downward pressure. That could support Gold by reducing the opportunity cost of holding a non-yielding asset. However, one important factor remains. If the administration responds by relying more heavily on tariffs, sanctions, or other executive measures, uncertainty could remain elevated. Depending on the reaction across major currencies and bond markets, the USD could still strengthen against some peers. So don't automatically buy Gold just because Democrats win. Watch the US Dollar and Treasury yields after the result.

Scenario two: Democratic House, Republican SenatePrediction-market pricing puts the probability of Democrats winning the House while Republicans retain the Senate at roughly 30%. This would create divided government and make major legislative changes more difficult. The White House could face greater congressional scrutiny, but Congress would not automatically reverse its existing policies. This scenario could broadly be neutral for the USD and US Treasury markets.

For Gold, that suggests the election result alone may not generate a sustained trend. Instead, traders may return their attention to the Federal Reserve, inflation, energy prices, government debt, and geopolitical developments. In other words, political headlines could create short-term volatility, but the broader macroeconomic backdrop would still determine whether Gold can establish a lasting move.

With a divided Congress, the election may deliver less of a clear fiscal signal. A Republican sweep, by contrast, could change expectations for spending, borrowing and inflation.

Scenario three: The Republican sweep, the biggest repricing riskThis outcome could produce the biggest market repricing, as markets have largely priced it out. A Republican sweep could give the administration greater room to pursue its legislative agenda, including additional fiscal stimulus. If investors anticipate stronger growth, higher government borrowing or more inflationary pressure, they could demand higher yields on longer-dated US Treasuries. That could support the USD if markets interpret the yield rise as a sign of stronger growth or tighter monetary policy. For Gold, this could create a significant headwind.

Are higher yields confidence, or fiscal concern?Another factor could matter more than the election headline itself: the cost of financing US government debt. When Treasury yields rise, the government pays more to borrow as it issues new debt or refinances maturing obligations. Higher yields can also feed through to borrowing costs across the wider economy, including mortgage rates.

A month before the vote, the US average 30-year fixed mortgage rate climbed to 7.49%, its highest level since November 2023, according to data from the Mortgage Bankers Association. The rise came as Treasury yields increased amid inflation concerns, geopolitical uncertainty, and the government's substantial financing needs.

Why should Gold traders care? Because higher long-term borrowing costs can tighten financial conditions across the economy. More expensive mortgages can weigh on housing demand. Higher financing costs can also pressure businesses and government budgets. If investors believe a Republican sweep will lead to more borrowing and fiscal stimulus, long-term yields could rise further. Initially, that could support the US Dollar and pressure Gold.

But a second possibility exists: If yields rise because investors grow increasingly concerned about government debt, fiscal sustainability, or the credibility of US economic policy, the USD may not strengthen as expected. Gold could benefit if investors turn to it as a store of value or a hedge against broader financial uncertainty.

This is the central question traders should ask: Are higher yields reflecting confidence in the US economy or growing concern about the US fiscal outlook? The answer could determine whether Gold falls or proves unexpectedly resilient.

Gold's technical picture: The burden of proof is on the bulls

Gold weekly chartGold's weekly chart shows that the medium-term recovery remains unconfirmed. The Relative Strength Index (RSI) is below the neutral 50 level. This suggests momentum remains weak, though the market is not necessarily oversold. More importantly, Gold is trading below two major weekly moving averages. This alignment puts the burden of proof on the bulls.

The first major support is at the psychological $4,000 area. A hotly contested election, a Republican sweep that lifts expectations for fiscal expansion, or a stronger USD could add pressure, but the bearish scenario would need confirmation from price action. A break below $4,000 would be a more significant deterioration in the technical picture. Traders would then target the 100-week Simple Moving Average (SMA) near $3,850, followed by $3,800.

On the other hand, in a Democratic sweep, investors would expect more fiscal restraint, lower long-term yields and reduced uncertainty around the Fed's independence. Then, the yellow metal could attempt a recovery. Gold first needs to reclaim the $4,215-$4,250 area. That's the confluence zone of the 23.6% Fibonacci retracement of the decline from $4,700 and the 21-week SMA. Above that, the next hurdle is the $4,400 zone, where the 50% Fibonacci resistance and the psychological level intersect. A sustained move above the resistance zone would improve the recovery case and open the door to the $4,460 region, where the 61.8% Fibonacci hurdle and 50-week Simple Moving Average align. The next resistance comes in at $4,500.

Recapturing those levels would provide stronger evidence that the recovery is gaining traction. 

If the election produces political gridlock and neither party can materially change the fiscal outlook, Gold could remain range-bound between $3,850 and $4,400. Investors could then refocus on inflation, the Fed's policy path, energy prices and economic growth.

Beyond the ballot: three risks for Gold tradersThe chart gives us the key levels: $4,000 and $3,850 below, and $4,400 and $4,460 above. However, Gold traders must watch three risks.

First, the Federal Reserve. If inflation stays elevated and policymakers signal further tightening, Gold could struggle even if election-related uncertainty increases.Second, geopolitical developments. A possible escalation involving Iran is an upside risk for the US Dollar. Depending on the nature of the shock, Gold could also attract safe-haven demand.Third, the US debt ceiling. Difficult negotiations in 2027 could create volatility in short-dated Treasury bills and broader financial markets.These risks show why it is dangerous to assume that one election result will dictate Gold's direction for months. Markets respond to the full policy and economic consequences, not just the political headline.

The bottom lineThe US midterm elections could trigger a major repricing of the US Dollar, Treasury yields, and Gold, but the outcome is not predetermined. A Republican sweep could raise fiscal-expansion concerns and pressure Gold if yields and the US Dollar rise. Democratic gains could limit new legislation and support Gold if yields ease. A divided Congress could leave markets focused on the Federal Reserve and the wider economic outlook.

Technically, watch $4,000 and $3,850 on the downside, and $4,400 and $4,460 on the upside. Don't trade the election headline. Trade the confirmed reaction.

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Gold (XAU/USD) rebounds slightly after dropping to a fresh three-month low, below the $4,000 psychological mark during the Asian session on Friday, though the upside seems limited. The Federal Reserve (Fed) recently signaled that there is no urgency to raise interest rates. Traders, however, are still pricing in around an 80% chance that the US central bank will raise borrowing costs again at its December policy meeting. Moreover, oil-driven inflation fears underpin prospects for further Fed tightening, which turns out to be a key factor driving flows away from the non-yielding bullion.

In fact, crude oil prices sit near a one-month peak, touched on Tuesday, due to supply concerns stemming from escalating conflict in the Middle East. The fighting between Saudi Arabia and Yemen's Iran-backed Houthi movement has escalated sharply, leading to Houthi drone and missile strikes on the kingdom's airports and critical energy infrastructure. In further developments, Iran’s Islamic Revolutionary Guard Corps (IRGC) said that renewed US attacks could prompt Tehran to invade neighbouring countries and hit bases used in US military operations as part of its new offensive strategy.

This comes on top of a report that the US and Israel have drawn up plans for a short but intense military campaign against Iran after the US midterm elections and keeps the geopolitical risk premium in play. Moreover, hawkish Fed expectations help the safe-haven USD to recover slightly from a three-week low, which exerts additional downward pressure on the Gold price. Traders, however, might refrain from placing fresh directional bets and opt to wait for more cues about the Fed's policy path. Hence, the focus will remain on next week's highly anticipated two-day FOMC meeting.

The Fed will announce its decision on Wednesday and is widely expected to leave interest rates unchanged. In the absence of updated economic projections, investors will scrutinize the accompanying policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference. This will be followed by the release of the Advance US Q3 GDP report and the US Personal Consumption Expenditures (PCE) Price Index – the Fed's preferred inflation gauge – next Thursday, which will play a key role in influencing the USD and provide a fresh impetus to the Gold price.

XAU/USD daily chart

Technical AnalysisThe overnight breakdown below a short-term trading range support and a sustained close below the $4,100 mark was seen as a key trigger for XAU/USD bears. Moreover, the Relative Strength Index at 34.34 hovers just above oversold territory, and the Moving Average Convergence Divergence (MACD) at -6.51 stays in negative territory, hinting that downside pressure persists despite some early signs of stabilization. The precious metal, however, shows some resilience below the $4,000 psychological mark, warranting some caution before positioning for further losses.

Meanwhile, any attempted recovery is more likely to attract fresh sellers and fizzle out near the trading range support breakpoint, now turned resistance, near the $4,065-$4,070 region. This is followed by the $4,100 round figure, which, if conquered, could trigger a short-covering rally and lift the XAU/USD pair to the $4,170 intermediate hurdle en route to the $4,200 mark. Sustained strength and acceptance above the latter is needed to back the case for a sustained near-term recovery.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Fed FAQs

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

Gold fell more than 1% on ‌Thursday as rising oil prices stoked inflation concerns and reinforced expectations that interest rates could stay higher for longer, while investors awaited next week's Federal Reserve meeting for clues on the policy ​outlook.

Spot gold slid 1.3% to $4,085.29 per ounce by 0530 GMT, hitting its ​lowest since October 14. US gold futures for December delivery dropped 1.2% ⁠to $4,100.90.

If oil prices continue to rise, inflation expectations could increase, raising the likelihood ​of higher interest rates over the longer term and weighing on gold, said Kelvin ​Wong, a senior market analyst at OANDA.

Oil prices rose on Thursday as more attacks by the Houthis in Saudi Arabia prompted the US to order some diplomats and family members to leave its missions ​in the Kingdom.

Though stubborn inflation, largely driven by high energy prices, has bolstered the ​case for tighter monetary policy, Fed policymakers are expected to remain patient for now.

Traders see just a ‌15% ⁠chance of a rate hike at the Fed's October 27-28 policy meeting next week, but are pricing in a 91% likelihood of an increase in December, according to CME's FedWatch Tool.

Markets await next week's Personal Consumption Expenditures (PCE) data, a key gauge closely ​watched by the central ​bank as it ⁠targets a 2% inflation rate.

Investors anticipate elevated interest rates at both the short and long ends of the curve, reducing gold's ​appeal by increasing the opportunity cost of holding the non-yielding ​asset, Wong ⁠said.

Spot gold still targets the October 14 low of $4,073 per ounce, as suggested by a wedge. Resistance is at $4,135, a break above which could lead to a gain into ⁠the $4,150-$4,169 range, ​according to Reuters technical analyst Wang Tao.

Among other metals, ​spot silver dropped 3.3% to $56.05, platinum slid 2.2% to $1,593.05 and palladium fell 2.7% to $1,057.32.

India's festival Gold buying peaks with Dhanteras on November 6 and Diwali on November 8, 2026. Last year's season already showed buyers shifting from jewelry to bullion as prices climbed, and this year's opens with a 15 percent import duty and a weaker rupee.

India's jewelry demand fell 24 percent in 2025 to 430.5 tonnes, according to the World Gold Council (WGC), while bar and coin demand climbed 17 percent to 280.4 tonnes. Gold had gained about 73 percent in rupee terms by late December, so the same budget bought far less metal in jewelry form.

The festival quarter widened the gap. Jewelry volumes fell 23 percent to 145.3 tonnes in Q4 even with wedding demand, and bar and coin demand rose 26 percent to 96 tonnes. Jewelry sales still rose 26 percent in rupee terms, so value and volume moved in opposite directions.

Retailers adapted. A bullion dealer cited in Commerzbank's note said jewelers had stocked small coins and bars ahead of Dhanteras and Diwali, and dealer premiums on Gold reached $25 an ounce, up from $15 a week earlier.

What changed in 2026In mid-May, India raised its import duty on Gold from 6 percent to 15 percent, which one analysis called the largest increase on record, to narrow a trade deficit that was weighing on the rupee. Prime Minister Narendra Modi also urged citizens to pause Gold purchases for a year.

Jewelry demand fell 15 percent year on year to 75.1 tonnes in April to June, while bar and coin demand rose 9 percent to 50.3 tonnes. First-half bar and coin buying reached about 113 tonnes, the highest in 13 years.

Source: Gold.orgReuters reported that dealers moved from discounts of up to $6 an ounce to premiums of up to $7 in mid-October, the first premium in more than three months, as the price pullback lifted jewelry purchases. A WGC and Kantar survey of 1,963 consumers (May 22 to June 3) found stronger purchase intent for investment Gold than for jewelry, yet one bullion merchant told Reuters that investors were still holding back as prices fall.

Supply data are mixed. India's September Gold imports fell to $1.8 billion from $9.6 billion a year earlier, trade ministry data showed, and a Mumbai dealer told Reuters the shortfall is tightening domestic supply, while the WGC's second-quarter report called supply adequate.

Why it matters for XAU/USD and the RupeeIndia accounted for 27 percent of global jewelry demand and 16 percent of global bar and coin demand in the second quarter, according to the WGC, so festival buying is a visible input to the physical market behind XAU/USD. Spot Gold trades near $4,170 an ounce, about a quarter below its January record.

The rupee is the other channel. Importers sell rupees to buy the dollars that pay for Gold, and Gold and silver made up about 11 percent of India's imports against 22 percent for oil, according to Money Metals Exchange analysis. In the second quarter, the LBMA Gold price was 37 percent higher than a year earlier while the domestic price was 59 percent higher, a gap the WGC tied to the duty hike and rupee depreciation.

What to watch through November 8Dealer premiums are the first reading. Commerzbank expected last year's premium spike to fade after the holidays, so a premium that holds after Diwali would say more than one during the festival.

October import data will show whether restocking came before the festivals or after. Several large Indian mutual funds also suspended bulk subscriptions to Gold ETFs in mid-October at the market regulator's nudge, Reuters reported, so ETF access is worth tracking too.

A weaker rupee lifts domestic prices even when spot Gold is flat, and the WGC noted that both price dips and price stability have supported purchases. Metals Focus has observed that Indian consumers tend to delay purchases after sharp price increases and then adjust, which would make the winter wedding season a second test of this year's demand. No single reading above predicts the festival total.

Gold Price Holds Above $4,100 as HSBC Defends Its Longer-Term Role HSBC sees lasting support for gold from reserve diversification, but forced selling can overwhelm that demand while higher interest rates weigh. The gold price in US dollars held around $4,134 an ounce at 15:19 BST on Tuesday, leaving bullion roughly 5.4% lower over the past month despite continuing demand for protection against fiscal and geopolitical risks.

HSBC Asset Management remains positive about gold's longer-term role, but cautions that the metal may offer little protection during an abrupt equity sell-off.

Bank of America's forecasts allow for that difficult near-term period: it projects $4,000 an ounce for the fourth quarter of 2026 before $5,000 in the second and third quarters of 2027.

Why gold can fall when investors seek safety HSBC writes: “But recent market action has shown gold failing to hedge against equity drawdowns. With leveraged capital crowded into gold, tumbling stocks trigger margin calls that force investors to unwind positions to raise cash.”

Gold can therefore be sold to meet losses in other markets, rather than because its owners have abandoned concerns about government debt or the purchasing power of currencies.

Evidence from September shows how different groups of buyers and sellers can pull prices in opposing directions.

The World Gold Council recorded $10bn of global gold ETF inflows during the month, yet managed-money net futures positions contracted by $12bn.

The council said: “This futures liquidation likely contributed to September’s price decline, highlighting the divergence between ETF and derivatives market flows.”

The council also identified rising Treasury yields and a stronger Dollar as pressures on bullion.

The figures do not measure the same transactions and should not be netted against one another, but they show why evidence of buying alone cannot establish that prices have found a floor.

HSBC cautions: "So although gold looks to be a robust hedge against systemic risks in a “multi-polar” world, it’s not guaranteed to work as a short-term volatility dampener."

The buyers behind the longer-term case HSBC says “there is still a compelling strategic rationale for the metal in portfolios as geopolitical fragmentation and central bank reserve diversification keep demand supported.”

It adds: "The “debasement trade” of shifting capital into “hard assets” such as gold can continue as concerns over debt and inflation linger."

That argument concerns demand to reduce exposure to currencies and government liabilities over time.

The World Gold Council's latest central-bank figures provide some support: reported net purchases reached 39 tonnes in August, with established buyers continuing their accumulation programmes.

Those purchases predate the latest market turbulence, so they cannot demonstrate how official buyers have responded to October's decline.

HSBC offers no numerical gold target in this assessment.

BofA continues to project an uneven path towards $5,000, with weakness before the stronger part of 2027.

Its metals team identifies the immediate obstacles: “The Iran war, higher oil prices, rising rates and a stronger USD are near-term headwinds.”

Higher interest rates increase the income forgone by holding bullion, while expensive energy can delay relief by sustaining inflation and pressure for further tightening.

BofA nevertheless says: “The wider macro environment, including the US’ unorthodox economic policies are ultimately supportive.”

The bank adds: “The hawkish Fed tilt will likely cap prices near-term”.

Gold Price FAQ Does HSBC have a gold price target?

Its assessment makes a positive longer-term case for gold without setting a numerical target.

When does BofA expect gold at $5,000?

BofA projects $5,000 an ounce for the second and third quarters of 2027, following a weaker fourth quarter of 2026.

Why can gold fall despite demand for safe assets?

Leveraged investors may sell gold to meet demands for cash elsewhere, while higher interest rates raise the opportunity cost of holding it.

Gold traded at a premium in India last week for the first time in three months. This reflects the combined effect of tightening supply and improving demand.

Dealers reported premiums as high as $7 an ounce over domestic spot prices. That compares with discounts in the $5-to-$6 range the previous week.

Indian gold demand has improved as prices fell even as the festive buying season kicked off.

During the first week of October, Indian gold prices fell to ₹145,538 per 10 grams, the lowest level in nearly two months. According to the Times of India, “The correction brought more buyers into the market compared with the previous week and also resulted in sellers offering smaller discounts.”

The falling price coincided with the beginning of the festive season in September. This is considered an auspicious time to buy gold. The festival season starts in September, building into Navratri (Oct. 11), and peaking around Dhanteras (Nov. 6) and Diwali (Nov. 8). Buying typically continues into the winter wedding season.

On the supply side, Indian gold imports plunged by 45 percent in August and slumped again in September, falling from $2.3 ​billion to $1.8 billion according to preliminary data.

Imports typically pick up in late summer as dealers stock up on metal for the fall buying season. However, the government has aggressively tried to curb imports.

The Indian government announced the 9 percent duty increase in May. The change pushed the import tax on gold and silver from 6 to 15 percent. The move came as India struggled with a surging trade deficit that is pressuring its currency.

Oil accounts for around 22 percent of the nation's imports. The sudden spike in oil prices due to the U.S.-Iran war has hit India particularly hard. The country imports nearly 85 percent of its fuel, and about 50 percent of its crude imports flow through the Strait of Hormuz.

With both gold and oil prices spiking, India’s import bill has exploded. The country’s merchandise trade deficit topped $330 billion in the financial year ending March 2026. That was up from over $280 billion a year ago, a 17.9 percent increase.

The trade situation has put significant downward pressure on the rupee.

Gold and silver make up about 11 percent of India’s imports. The government raised import duties, hoping to limit metal flowing into the country. This will theoretically close that massive trade deficit and support the rupee.

So far, the move has proved effective, but it’s starting to create shortages of metal within the country.

More recently, several large Indian mutual funds issued public notices suspending bulk subscriptions to gold ETFs. According to Reuters, “The decision was taken following a nudge from the ​Securities and Exchange Board of India.”

While government intervention can limit imports, it’s unlikely to curb Indian’s appetite for gold.

When the government announced the import duty increase, Metals Focus pointed out that Indian gold and silver demand has historically remained resilient in a higher-tax environment. This reflects Indians' deep cultural connection to precious metals and their value as a store of wealth. As the rupee continues to depreciate, gold will become increasingly attractive.

According to Metals Focus analysts, “Consumers often delay purchases initially following sharp price increases but typically adjust to higher price levels over time. In addition, elevated duties could encourage a recovery in unofficial flows, which had collapsed following the 2024 duty reduction.”

That’s reflected in resilient festival season demand despite higher prices.

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Gold and silver find support from falling Treasury yields, but persistent inflation and Fed rate hike risks could limit their recovery.

Gold (XAU) rose towards $4,183 in early Asian trading on Monday as US Treasury yields continue to drop. Concerns about AI funding needs and shipping risk in the Middle East pushed investors towards government bonds.

Oil prices also eased after Trump waived some Russian sanctions, but the policy remains under review. However, Brent oil trades above $108 and leaves the cost of energy elevated. In my view, the drop in Treasury yields could support further gains in both metals. But another surge in oil could revive fears of inflation and weaken the recovery.

The rate hikes by the Fed remain the main threat to the gold and silver outlook. US inflation increased to 3.7% in September from 3.4% in August. Gasoline prices jumped 9.1% during the month. The market expects a pause in October, but expectations for a hike in December still remain at 85%.

Fed Chair Kevin Warsh gave no clear signal about the next move. The high rates could strengthen the US dollar and renew pressure on both metals. Silver (XAG) could face additional pressure if the high cost of borrowing weakens industrial demand. This leaves room for a rebound but a strong recovery needs further relief in yields and the US dollar.

Gold Price Forecast: Recovery Faces Resistance at $4,200–$4,250 The daily chart for spot gold shows that the price is still trading at the support of the triangle pattern that has been forming since May 2025. The price remains below the 50- and 200-day SMAs, and the RSI remains below the midline. This suggests a negative trend and indicates that prices remain under pressure.

The immediate resistance in the gold price remains the $4,200 region. A break above $4,200 will likely push the price towards $4,330. However, the gold price needs to break above the $4,520 area at the 200-day SMA to indicate that the bottom is in and open the way for a strong rally in the gold market.

The weekly chart for spot gold also shows that the price is consolidating below the ascending trend line that stretches from the October 2023 lows. However, the price must break below $3,950 to indicate a strong drop and a deeper correction. However, if the price recovers successfully above the ascending trend line at $4,300, it will likely confirm a positive trend and open the way for further upside towards the $5,000 level.

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The 4-hour chart for spot gold also shows that $4,200 remains the key resistance in the short term. The price must break above the $4,200-$4,250 zone to signal a recovery in the short term. However, a break below the ascending trend line at $4,070 will likely push prices further down towards the $3,900-$4,000 area.

Silver Price Forecast: Break Above $64 Could Open Path to $72 The daily chart for spot silver shows that the price produced a rebound from the $55 support zone. The price must break above the $64 area to open the way for further upside towards the 200-day SMA at $72. A recovery above $72 is required to push prices towards $89.

On the other hand, a break below $55 will open the way for a further drop towards the $45 support area. The RSI also entered oversold territory as the price reached the $55 support. However, a break below $55 will likely push the RSI into oversold territory. If the silver price continues to drop, it will likely mark a long-term bottom at the $45 support zone.

The 4-hour chart for spot silver also shows strong consolidation in prices above the $55 area. The price remains between $55 and $63. A break of either of these levels is required to push prices in the next direction.

A break below $55 may push prices towards the $50 area, as indicated by the lower boundary of the descending wedge pattern. However, a break above $63 is required to push prices up to the $72 region.

What to Watch Next Gold and silver prices could extend their rebound if Treasury yields continue to drop. However, high oil prices and the risk of further rate hikes by the Fed could limit gains by keeping inflation pressures elevated. Gold needs to break above $4,200-$4,250 to strengthen the recovery, while silver needs to clear $63-$64. On the downside, a break below $3,950 in gold or $55 in silver could open the way for deeper losses. Both metals need further relief in yields and the US dollar to build a stronger recovery.

Read more: Falling Yields Fuel Rebound in Gold and Silver Despite Hot PPI

Muhammad Umair is a finance MBA and engineering PhD. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.

Latest news and analysis

Spot gold weekly chart shows larger trend structure Weekly Structure Hints at a Trend Reversal The weekly chart provides a perspective that is less apparent on the daily timeframe. This week formed a higher weekly high and higher weekly low, signaling an attempted reversal in the bearish correction. Although the breakout was not confirmed by a daily or weekly close above last week’s high of $4,208, it suggests improving underlying demand and leaves open the possibility of another attempt to break above the two-week consolidation range.

Breakout Triggers Define the Bullish Case A move above the 20-day moving average would provide an initial sign of strength and could attract additional bullish momentum. However, a decisive advance above the recent lower swing high of $4,226 is needed to trigger a bullish reversal signal in the daily trend structure. Another earlier sign of strength would be seen on a rise above this week’s high of $4,217, as a rise above it would signal renewed strength in the weekly advance. A sustained move above the relevant swing high would also reinforce the potential for a new advance from the $4,066 support area, following the initial recovery from the early-August consolidation low.

ABCD Pattern Points Toward $4,821 An upside breakout would open the way toward a measured-move target near $4,821 (D), projected by the rising ABCD pattern on the chart. Price symmetry for the two upswings converges at that level, making it a potential resistance zone. A decisive breakout above this target, however, would signal continued strength and expose the next upside resistance zone. Until gold clears those near-term resistance levels, the ability to hold support above $4,066 remains central to the potential recovery.

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Gold (XAU/USD) reverses a modest Asian session dip on Friday, though any meaningful appreciation seems elusive amid a modest US Dollar (USD) uptick. The energy-driven acceleration in US inflation lifted market bets for an imminent rate hike by the Federal Reserve (Fed). Moreover, US bond yields seem to have stabilized following Thursday's steep decline, which, along with escalating tensions in the Middle East, seems to underpin the safe-haven USD. This, in turn, might cap the upside for the precious metal as traders keenly await Fed Chair Kevin Warsh’s speech.

The US Bureau of Labor Statistics (BLS) on Wednesday reported a broad increase in consumer prices in September as the US-Israeli war with Iran kept oil prices elevated. Adding to this, the US Producer Price Index (PPI), published on Thursday, advanced 1.3% last month, marking the largest gain since March 2022, and the yearly rate soared to 6.3%. Excluding the ​volatile food and energy components, the core PPI climbed 0.7% and 5% on a monthly and yearly basis, respectively, suggesting that inflation is broadening out beyond energy products. Investors, however, seem convinced that the Fed will keep rates unchanged later this month.

Meanwhile, CME Group's FedWatch Tool indicates over a 90% chance that the US central bank will raise borrowing costs again at its December policy meeting. Hence, Warsh's remarks at the Annual Meetings of the International Monetary Fund (IMF) and World Bank Group, in Bangkok, will be scrutinized for more cues about the Fed's future policy path. The outlook, in turn, will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the precious metal. In the meantime, persistent geopolitical uncertainties turn out to be another factor acting as a tailwind for the Greenback.

In fact, the Iran-backed Houthi group carried out a deadly missile attack targeting the presidential palace, the seat of Yemen's Saudi-backed and internationally recognised government in the southern city of Aden. Adding to this, French Foreign Minister Pascal Confavreux confirmed that France has started deploying its military assets in Saudi Arabia. Adding to this, the US military developed strike plans that include 'mother of all bombs' against Iranian energy infrastructure and nuclear sites. This raises the risk of a further escalation of tensions in the Middle East, which might continue to support the USD and cap the upside for gold.

XAU/USD 4-hour chart

Technical AnalysisThe XAU/USD pair, so far, has been struggling to find acceptance above the 100-period Simple Moving Average (SMA) and remains below the 61.8% Fibonacci retracement level of the July-August upswing. That said, the Moving Average Convergence Divergence (MACD) indicator is positive and rising, hinting at strengthening upside momentum. Adding to this, the Relative Strength Index (RSI) around 56 suggests mildly bullish conditions without reaching overbought territory.

However, it will still be prudent to wait for a sustained move beyond the $4,200 mark and the 61.8% Fibo. retracement at $4,238 before positioning for further gains toward the next upside barriers near the 50.0% retracement at $4,325 and the 38.2% level at $4,412. On the downside, immediate support is offered by the 78.6% Fibo. retracement at $4,115, which is followed by the $4,075-$4,065 horizontal support. A convincing break below the latter would make the Gold vulnerable to challenging the Fibonacci structural floor at $3,957.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

Gold price climbs after another US inflation report on Thursday. Although the snapshot of US wholesale inflation came in hotter than expected, it was already priced in by investors, who trimmed their hawkish bets on the Federal Reserve (Fed). That produced a tailwind for the yellow metal, which benefits from lower interest rate environments. The XAU/USD trades at $4,148, up 1.1%.

Bullion rebounds as falling Treasury yields and reduced October Fed hike bets lift BullionBullion prices recovered following a red-hot US Consumer Price Index (CPI) report on Wednesday, which prompted investors to increase hawkish Fed bets. Nevertheless, toward the end of the session, traders reduced those bets ahead of the release of Thursday's Producer Price Index (PPI).

The US PPI in September jumped above the 6% threshold, largely due to a rise in energy prices. The headline print exceeded estimates of 5.3%, surging to 6.3% YoY, while underlying inflation jumped from 4.8% to 5%, also above forecasts.

The Greenback and US Treasury yields initially steadied, before weakening, a tailwind for the precious metal. The US Dollar Index (DXY), which measures the performance of the buck’s value against a basket of six peers, edged down 0.4% to 102.11. At the same time, the yield of the US 10-year benchmark bond fell ten basis points to 5.089%.

After the data release, money markets now expect a 26% chance of a 25-basis-point rate hike by the Fed at the October 28 meeting, though for December they priced in a 92% chance.

In the meantime, Federal Reserve officials, led by San Francisco Fed President Mary Daly and Governor Michelle Bowman, stated that an immediate rate hike might not be needed.

US Retail Sales in September also cooled from 1.3% to 0.8% MoM but came in better than economists' projections of 0.3%. Further data showed that Initial Jobless Claims for the week ending October 10 came at 199K, below forecasts of 200K.

Investors are also looking for comments from Fed Chair Kevin Warsh at the International Monetary Fund's annual meeting, looking for clues ahead of this month's Fed meeting.

XAU/USD technical analysis: Gold jumps back above $4,100 but remains bearishOn Wednesday, Gold reached a weekly low of $4,073, but during Thursday’s sessionit reclaimed the $4,100 mark and is hovering near $4,150. Despite this, the Relative Strength Index (RSI) remains bearish but is showing signs that buyers are moving in.

For a bullish reversal, buyers need to clear $4,200 before testing the 100-day Simple Moving Average (SMA) at $4,245. Above lies the 50-day SMA at $4,334.

For a bearish continuation, the first support for XAU/USD is $4,100. A decisive breakdown will expose the October 14 low of $4,073, then the July 29 cycle low at $3,996, and finally the July 17 low at $3,959. Below that is the yearly low at $3,941.

Gold daily chart
Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Market context and the 7th-order institutional demand defenseOn the 4-hour execution continuum, XAU/USD (Gold vs US Dollar) has transitioned into a tight structural compression, with spot price stabilizing near the 4,135.84 mark. Following a prolonged liquidation phase from the 4,700+macro highs, sellers have encountered a formidable institutional liquidity threshold. Downside probes have repeatedly failed to generate continuation, stalling against the monolithic bid foundation established across the 4,040–$4,090 pricing corridor.

This inability of sellers to force follow-through represents textbook Sell Volume Absorption. Rather than accelerating downward, price action has locked into a horizontal base. The market is physically coiling against an immovable wall of limit buy orders, signaling that the directional momentum of the preceding decline has reached terminal exhaustion.

Cluster density analysis (Sidebar architecture)Data aggregation via the SMAS Sidebar 3D exposes the dense structural friction defending the current consolidation:

The underlying titanium foundation: Directly anchoring current price action lies a 7th-Order Institutional Demand Super-Cluster (7TF: M5-M15-M30-H1-H2-H4-W1) spanning $4,040 – $4,090. Seven independent temporal horizons—from the 5-minute microstructure pulse to the macro Weekly baseline—have synchronized their confirmed demand footprints at this exact coordinate, creating a powerful multi-timeframe floor.Overhead resistance echelons: Any relief rotation will face layered supply barriers:An immediate 7th-Order Tactical Supply Cluster (7TF: M5-M15-M30-H1-H2-H3-H4) concentrated across $4,195 – $4,245.An intermediate ceiling at the 8th-Order Institutional Massif (8TF: M5-M15-M30-H1-H2-H3-H4-D1) spanning $4,340 – $4,430.Macro supply slabs positioned higher up across the $4,500 – $4,680 zone.Multi-timeframe phase telemetry (Structure balance 3D)The SMAS Structure Balance 3D module captures an inflection state of structural equilibrium, flashing an official BALANCED [7 vs 6] status:

Residual Intraday Drag: Intermediate frames still carry historical downside bias: M30 (-38°), H1 (-28°), H2 (-31°), H3 (-18°), and H4 (-8°). However, the visible deceleration from -38° down to just -8° on H4 confirms that selling velocity is rapidly drying up.Micro-Impulse Turnaround: Rapid tactical horizons have already initiated positive phase inversion: M3 (+16°), M5 (+3°), M10 (+7°), and M15 (+8°) have flipped green, confirming active limit accumulation.Macro Baseline Anchor: The senior macro horizon W1 remains firmly bullish at +26°, acting as a steady structural anchor.Telemetry Synthesis: This divergence between fading intraday selling and micro-buying against the weekly foundation confirms a classic Spring Compression Pattern, setting the stage for a mean-reversion rebound.Vector geometry and channel trajectory (Structure engine 3D)The SMAS Structure Engine confirms clear trend exhaustion on the active dynamic channel:

The channel's invariant slope angle currently reads at -18.2°, reflecting significant downward deceleration compared to earlier impulse phases.Price action is pressing directly into the channel's lower dynamic boundary. Having absorbed the downward move at these outer structural rails, directional sellers lack the momentum for an expansion breakdown, indicating a high-probability rotation back toward the channel's central equilibrium axis.Execution protocol and quantitative trade parametersWith sellers failing to breach the 7th-order demand foundation and phase balance stabilizing at the weekly anchor, an asymmetric Long Mean-Reversion Scenario is activated:

Order type: Long Accumulation / Buy Limit.Execution coordinate range: $4,110 – $4,138 (Current price: 4,135.84).Structural invalidation (Stop Loss): $4,025 (Placed safely below the 7TF titanium demand floor and the W1 base; calculated risk: ~85–110 points).Target objective 1 (Take Profit 1): $4,235 (+100 to +125 points; Retest of the 7TF supply cluster perimeter. Protocol: Liquidate 50% volume and systematically move Stop Loss to Breakeven +0.1H).Target objective 2 (Take Profit 2, Final): $4,360 (+225 to +250 points; Lower boundary of the 8th-Order Institutional Supply Massif 8TF).Risk / Reward Ratio: 1 : 2.45.

XAU/USD Forecast: Goldman's $5,235 Outlook Faces Fresh Inflation Test Goldman Sachs expects gold prices to recover over twelve months, but stronger US inflation puts renewed pressure on its case for limited Fed tightening. Goldman Sachs's forecast for gold to reach $5,235 an ounce in twelve months faces a more difficult near-term rates outlook after US underlying inflation proved stronger than expected on Wednesday.

Spot bullion traded near $4,090 an ounce, down around 1.6% against its previous close, leaving the bank's projection roughly 28% above the latest price.

Image: Gold price vs USD reaction to US inflation release on Wednesday. Goldman's optimism rests heavily on central-bank purchases, while its strategists acknowledge that tighter monetary policy can discourage investment demand well before those longer-term buyers lift prices.

The bank had already lowered its end-2026 gold target to $4,650 an ounce, explaining that "a more hawkish Fed might weigh on ETF demand in the near term."

Inflation leaves gold competing with interest income The September US inflation release showed core prices rising 0.3% on the month, above Goldman's pre-release estimate of 0.24%.

Higher expected interest rates raise the income investors give up by holding gold, which pays none.

Goldman's strategists had identified that pressure before Wednesday's figures: "Commodities remain volatile given Middle East tensions, while more hawkish central banks and rising real rates have also weighed on Gold."

The latest pressure followed a respite earlier in the year, when energy prices and market inflation expectations fell together.

Goldman writes: "Market-based inflation momentum fell sharply in Q2, ahead of the macro data, as energy prices and breakeven inflation declined, unlocking rate relief and supporting risky assets."

"Since Q3, however, it has risen again amid higher energy prices and ongoing Middle East tensions."

Its economists still expect that renewed inflation pressure to fade.

"The global bond sell-off accelerated owing to sticky inflation and Middle East tensions combined with resilient growth, fiscal concerns, hawkish central banks and intensifying capital competition from the AI capex boom."

"The rise has been led by front-end and real yields, leaving market pricing considerably more hawkish than our economists' baseline, which assumes limited core inflationary pressures will constrain central bank tightening."

"Given our baseline of normalising inflation, peaking energy prices and more dovish central banks, 10-year bonds should gradually move from headwind to hedge in portfolios."

Wednesday's core reading complicates that argument because the rise cannot be attributed entirely to food and energy.

It does not establish a new twelve-month inflation trend, but it supplies less reassurance for a quick retreat in rate expectations.

Goldman also identifies a route to lower yields through weaker growth rather than an immediate improvement in inflation.

Its strategists write: "The clearest route to a near-term peak in global yields would be tighter financial conditions weakening growth sentiment; recent pressure in corporate and sovereign credit suggests the sell-off may already be approaching a speed limit."

Reserve buying supports the longer view Goldman describes continued central-bank diversification as "the main structural driver of their constructive gold view", distinguishing reserve managers' purchases from the exchange-traded fund demand most exposed to changes in the Fed outlook.

The split between longer-term buyers and rate-sensitive investors also featured in Exchange Rates UK's coverage of BofA's uneven gold recovery outlook.

Goldman's analysis gives European investors another reason to hold bullion, beyond anticipating lower US interest rates.

"We also see more value in Gold for European investors that try to reduce EUR exposure and hedge further increases in EU sovereign risk premia."

Gold can therefore attract demand as protection against European fiscal instability while still suffering from higher US borrowing costs.

Goldman's caution on the timing of rate relief is explicit: "Although front-end rates are increasingly skewed to the downside, energy-price volatility and monetary policy uncertainty remain elevated."

Gold prices FAQ What is Goldman Sachs's twelve-month gold forecast?

Goldman forecasts $5,235 per troy ounce in twelve months, roughly 28% above the Wednesday price used in this article.

Has Goldman become more cautious about gold?

Its end-2026 target was reduced to $4,650, reflecting the risk that a more hawkish Fed restrains ETF demand.

Why does Goldman still expect a gold recovery?

It identifies central-bank diversification as the main structural support, alongside a broader expectation that inflation and rate pressure will ease.

The Chinese government has tried to internationalize the yuan and raise its stature as a global currency for decades. Hong Kong's ascension as a prominent yuan-denominated gold trading hub is giving that effort a big boost.

S&P Global Ratings managing director Charles Chang told CNBC that Hong Kong's evolution as a gold trading center and the ensuing elevation of the yuan's status could ultimately undercut the dollar.

“As those trading volumes grow, there would be a growing volume of the physical gold trade that is denominated in RMB and not linked in USD.”

Chang said the biggest challenge to internationalizing the yuan is finding places to use it. Hong Kong’s rapidly developing gold-trading platform coupled with Beijing’s aggressive gold buying creates such an avenue.

“In terms of gold particularly, if the RMB that the buyer receives can be converted to gold, then it gives more channels for the spending to be done.”

Hong Kong's quest to become a global gold hub

Earlier this summer, Hong Kong launched trial operations of a gold clearing and settlement system, putting the region in a position to challenge Western dominance of the global gold market.

The government-owned clearing system reportedly “mirrors” the financial infrastructure used by the LBMA in London.

When unveiling the system, Hong Kong Precious Metals Central Clearing Company CEO John Lee Ka-chiue said the company will offer “a comprehensive suite of services ranging from gold deposits and withdrawals to transaction settlements in the over-the-counter market in Hong Kong,” adding that a new gold price ticker – HAU – would be introduced to “ensure that Hong Kong gold prices are fully accessible to global market participants.”

To facilitate the clearing system, the Shanghai Gold Exchange (SGE) opened its first offshore gold delivery vault in Hong Kong.

At the time, Secretary for Financial Services & the Treasury Christopher Hui said that the SGE's decision to establish its first International Board certified vault in the special administrative region “offers international investors an option for delivering gold offshore, marking a key stride in the internationalization of the country's gold market, extending the global footprint of renminbi-denominated gold trading, and further strengthening Hong Kong's role in the regional market.”

Over the next three years, Hong Kong plans to expand its gold vaulting capacity from 150 to over 2,000 tonnes.

“If Hong Kong can complete this transaction, then it would become one of the largest gold trading centers in the world,” Chang said.

Last month, Hong Kong Exchanges and Clearing (HKEX) announced plans to launch a yuan-denominated gold futures contract early next year.

According to the South China Morning Post, the move aims to advance two priorities outlined in the city’s five-year plan announced last week:

Promoting yuan internationalizationDeveloping Hong Kong’s gold marketChinese central bank Gold buying also boosts YuanMeanwhile, the People’s Bank of China continues the aggressive expansion of its gold reserves.

The Chinese central bank has reported an increase in its official gold reserves for 23 straight months, including a 23-tonne addition to its official holdings in September. This followed 20-tonne purchases in July and August.

Year-to-date, the People’s Bank of China has reported 80 additional tonnes added to its gold holdings.

And the Chinese have bought a lot more gold than that. According to data parsed by the renowned Money Metals researcher, the Chinese central bank currently sits on more than 5,000 tonnes of monetary gold in Beijing – more than TWICE what Chinese officials publicly admit.

Guotai Junan International chief economist Hau Zhou said this consistent gold buying “reinforces the credibility of the renminbi’s internationalization drive.”

“By steadily increasing gold reserves, Beijing is strengthening the long-term backing of its financial system and reducing reliance on dollar-denominated reserve assets. While gold alone will not determine the RMB’s global role, it enhances confidence in the currency and supports broader efforts to expand its use in trade, investment and official reserves.”

Nanhua Futures head of precious metals and new energy research Xia Yingying said gold accumulation by China and other central banks will “reduce global reliance” on U.S. Treasuries and dollar reserves.

“In the medium to long term, it will gradually weaken the U.S. dollar’s monopolistic position in the global reserve system.”

A problem for the U.S.While the dollar won’t likely fall from its perch as a global reserve currency, even modest de-dollarization is problematic for the United States.

The U.S. depends on global demand for dollars.

The greenback’s role as the world's reserve currency is the only reason the U.S. can borrow, spend, and run massive budget deficits to the extent it does. It creates a built-in global demand for dollars and dollar-denominated assets. This absorbs the Federal Reserve’s money creation and helps maintain dollar strength despite the Federal Reserve’s inflationary policies.

A de-dollarization of the world economy could cause a dollar glut. The U.S. currency could further depreciate. At the extreme, global de-dollarization could spark a currency crisis. You and I would feel the impact through higher price inflation, eating away at the dollar's purchasing power. In the worst-case scenario, it could lead to hyperinflation.

Gold continues to move back and forth in a narrow range below $4,200 in Asia on Tuesday, consolidating its recovery from two-month troughs.

Gold struggles below $4,200Despite a broad-based US Dollar (USD) retreat from an 18-month peak, Gold keeps facing headwinds from geopolitical risks in the Middle East and between Russia and Ukraine.

These keep expectations for high inflation alive, even as Oil prices and US Treasury bond yields are off their recent multi-month highs.

According to The Guardian, “Saudi Arabia has been forced to suspend all flights to and from its main international airport in Riyadh until next Saturday after a further round of Houthi missile attacks caused more damage and left one person dead.”

More missiles were fired at Saudi Arabian cities by the Houthis on Monday, a Saudi Arabian military spokesperson said.

Meanwhile, Ukrainian President Volodymyr Zelenskyy on Monday accused Russia of continued missile and drone attacks on Ukrainian energy infrastructure. This came after US President Donald Trump claimed that Moscow had agreed to an "energy ceasefire" aimed at sparing energy-related infrastructure in Russia and Ukraine.

However, the downside in the non-yielding bullion appears capped by the sharp sell-off in Asian stocks, hit by tumbling artificial intelligence (AI) stocks and profit-taking as the third-quarter earnings season begins.

 Additionally, increased bets that the US Federal Reserve (Fed) will hold interest rates this month continue to support Gold. Traders now look forward to Wednesday’s US Consumer Price Index (CPI) data release for fresh insights on the Fed’s interest rate outlook for the rest of this year.

The inflation report is one of the last major economic releases before the US Federal Reserve's (Fed) monetary policy meeting due later this month.

US CPI seen as key driver for near-term Fed expectationsAnalysts at Societe Generale highlight that, beyond geopolitics, “the week's main non-geopolitical event comes on Wednesday with the release of US CPI.” They argue that if “we see a pickup in core inflation to 2.5% (the market consensus), there will be little chance of any shift in market expectations: no rate hike this month, but a very strong chance of one in December and another in Q1.”

In the meantime, geopolitical developments worldwide will keep influencing the Gold price action.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,184.28. The metal remains under a clear bearish bias as it holds below the 50-day simple moving average (SMA) at $4,339.65, the 100-day SMA at $4,252.86 and the 200-day SMA at $4,527.18, keeping the broader downtrend in place despite a modest rebound from recent lows. The 14-day Relative Strength Index at 45.10 is mid-range and slightly recovering, which hints at easing bearish momentum rather than a decisive shift in trend.

On the topside, initial resistance is located at the 100-day SMA near $4,252.86, with a subsequent barrier at the 50-day SMA around $4,339.65; a sustained break above these clustered averages would be needed to soften the prevailing negative tone, while the 200-day SMA at $4,527.18 marks a more distant cap and a key medium-term hurdle. On the downside, the next notable support sits at the upward trendline break level around $4,001.82, where buyers may attempt to defend the broader bullish structure from earlier in the year.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Interest Rates and the Middle East
That being said, interest rates are moving on noise coming out of the Middle East and concerns about energy inflation. I think the other big situation here will be interest rates. We see interest rates fall, and then generally speaking, that does help gold. That has been the situation here as of late, and continues to be the main mover of markets.

It is not really a situation where it has anything to do with much beyond that, other than a few examples out there that are a little bit different, such as France, which is more of a fiscal problem. This is a completely different situation than most countries.

As long as rates remain high, it does work against non-yielding assets such as gold, and therefore it looks like we are essentially stuck at the moment. We do have a massive amount of demand underneath, though, and that should continue to keep this market somewhat buoyant.

Gold Buyers Have Not Disappeared. Futures Investors Have Been Selling Gold's rebound faces a further test from US yields, but UBS and Crédit Agricole expect central-bank demand and fiscal concerns to support prices. The gold price recovery on Friday has steadied the market without removing the interest-rate pressure that UBS believes could drive another retreat towards $4,000 an ounce.

Spot gold closed near $4,195, up 1.2% on the day, as buyers extended Thursday's rebound.

UBS sees a much stronger market by mid-2027, forecasting $5,200 by June 2027, while Crédit Agricole expects a faster recovery over the remainder of this year.

The disagreement concerns the pace of the recovery, with both banks looking beyond the immediate competition from interest-bearing assets to demand from central banks and investors seeking protection against fiscal risks.

UBS strategist Giovanni Staunovo writes: "The gold price has fallen as rising US real yields and a stronger US dollar increase the opportunity cost of holding the metal. As a non-yielding asset, gold typically becomes less attractive when real US yields rise. These macroeconomic headwinds could persist in the near term, leaving prices vulnerable to another test of the USD 4,000/oz level."

For UBS, a more durable recovery depends partly on investors revising their expectations for Federal Reserve policy, reducing the inflation-adjusted return available on competing assets.

Image: Gold price (XAU) in USD over the last three months timeframe. ETF buyers have stayed while futures investors retreated The recent decline has not reflected a uniform withdrawal from gold.

Staunovo writes: "That said, ETF holdings have remained unusually resilient, with steady inflows in recent weeks. The decline in prices appears to have been driven by non-commercial accounts, which have reduced their net-long positions in gold futures and options."

The World Gold Council's September figures show physically backed ETF holdings rising by 67 tonnes despite the fall in prices.

Staunovo writes: "We continue to expect annual central bank purchases of 750-1,000 metric tons, providing an important source of structural support for gold."

That divergence gives UBS evidence for its longer-term view, while also showing why continued buying by one group cannot guarantee a rising market.

Selling through futures can outweigh physical investment flows over shorter periods, especially when changes in yields prompt investors to reduce speculative exposure.

Staunovo noted: "Still, we think gold has proved notably resilient to the sharp rise in yields. Its sensitivity to real rates has weakened, suggesting that structural demand is providing a stronger offset than in previous cycles. Central bank diversification, concerns about rising public debt levels and debt-servicing costs, our expectation of a weaker US dollar over time, and robust Chinese buying should continue to underpin the market. Meanwhile, demand in India should benefit from the upcoming festival season and lower prices."

Crédit Agricole expects more of the recovery this year For December 2026, Crédit Agricole forecasts $5,000 an ounce, $400 above UBS's target for the same date.

The difference places a greater burden on the timing of renewed demand in Crédit Agricole's outlook, with less than three months remaining before that forecast falls due.

Crédit Agricole's earlier case for $5,000 gold acknowledged that an immediate need for Dollars could force some official holders to sell, even as reserve diversification supported longer-term demand.

The bank's latest assessment retains that conditional view of renewed buying: "Central banks still see XAU as a primary tool to reduce their exposure to the USD given the attempts by the US to weaponise the currency. They could thus resume gold purchases especially if the global energy shock continues to fade. Concerns about fiscal dominance over the Fed could return as well, weigh on US real rates and help XAU recover."

That would change the significance of high government borrowing costs for gold.

Yields currently make bullion less attractive, but pressure to contain debt-servicing costs could eventually undermine confidence in monetary policy and increase demand for an asset outside the government bond market.

UBS's path depends on a substantial change in the interest-rate outlook from the one investors currently anticipate.

In its latest assessment, Staunovo writes: "Market participants are pricing in a bit more than 75 basis points of Fed rate hikes until the end of 2027. We expect the Fed to hike once more this year and cut rates twice by 25 basis points each in 2027."

Gold price outlook FAQ What is UBS's gold forecast?

UBS expects $5,200 an ounce by June 2027, while warning of another near-term test of $4,000.

Which bank is more bullish for December 2026?

Crédit Agricole's $5,000 target is $400 above UBS's forecast for the same date.

Why can gold fall while ETFs keep buying?

Selling elsewhere in the market and competition from higher real yields can outweigh ETF demand over shorter periods.

Gold attempts breakout after punishing decline since late August
Dollar's historically stretched rally shows signs of losing momentum
Treasury futures attempt bottom following extreme oversold conditions
Gold bulls eye $4,225–$4,235 as first major upside target
Gold is attempting to break out after a punishing bearish period since late August, just as two of the key markets that contributed to its weakness are showing signs of potentially reversing.

US 10-year Treasury note futures look to be establishing a bottom, having hit extreme oversold conditions earlier this month, while the US Dollar Index has broken its short-term uptrend after becoming unusually stretched to the upside.

The question now is: can gold make the breakout stick?

Gold's relationship with the dollar and Treasury futures
As the correlation matrix below demonstrates, the US dollar has maintained a strong inverse relationship with gold, particularly over longer timeframes, with the 120-session correlation sitting at -0.86, while the relationship over the past month remains firm at -0.80.

Source: TradingView

While less consistent than the relationship with the US dollar, 10-year Treasury note futures have also demonstrated a positive correlation with gold over the past week and fortnight, strengthening dramatically to +0.89 over the past month. Futures are used as the preferred measure given they're directly tradable, unlike Treasury yields.

US dollar rally showing signs of exhaustion
Given the strength and persistence of the inverse relationship with the dollar, the chart below makes for interesting viewing, not only for those trading FX, but also precious metals.

Source: TradingView

After becoming historically stretched to the upside, with RSI (14) reaching 76.8, placing it in the highest 1.5% of observations since 2013, and the ATR (50) stretch exceeding four, ranking in the highest 5% of the dataset, there are signs the big dollar is starting to roll over.

RSI (14) has moved back below overbought territory and is setting lower highs, while the uptrend in place since early September has cracked. That doesn't mean the break will stick, but if it does, it points to a potential change in the dollar's trend, at least over the short to medium term.

Treasury futures showing signs of a bottom
It's not just the dollar that looks like it may be approaching a turning point.

US 10-year Treasury note futures are also showing signs of trying to carve out a bottom following a punishing selloff that saw the price fall below the lows set in 2023.

Source: TradingView

RSI (14) fell to 19.7 in late September, ranking among the lowest 0.5% of observations since 2016, while the ATR (50) stretch reached -5.08, placing it among the most extreme 2% of readings.

Noticeable downside wicks suggest buyers have been stepping in at lower levels, coinciding with a significant increase in trading volumes. While this raises the possibility of a turning point over the short to medium term, it's far too early to declare a definitive bottom.

Gold breakout gathers momentum

Source: TradingView

The four-hourly chart highlights the punishing bearish trend gold has endured since late August, falling more than $600 per ounce from its high just shy of $4,700.

However, after breaking to fresh multi-month lows earlier this week, the price rebounded sharply from support around $4,070. A period of grinding price action followed before today's breakout above downtrend resistance during Asian trade, with gold subsequently clearing $4,184.43, the October 7 high.

That level now becomes the immediate downside focal point. A pullback and bounce could provide an opportunity to initiate longs with a tight stop beneath for protection, initially targeting former support between $4,225 and $4,235. Beyond that, $4,300, $4,333.58 and $4,400 are the levels to watch.

Alternatively, a reversal back beneath $4,184.43 could open the door to shorts, initially targeting the broken August downtrend, followed by $4,116.30, a level that has acted as both support and resistance previously this year.

Like the price action, the oscillators are becoming more positive for the bulls. RSI (14) has moved rapidly above 50, while MACD has staged a bullish crossover and flipped positive, suggesting upside momentum is building and improving the prospects of the breakout sticking.

At 16:05 GMT, spot gold is trading at $4,107.44, down $3.90 or -0.09%. It opened at $4,112.73, reached $4,143.43 and bottomed at $4,103.45.

The Fed Still Has Another Hike in the Market The September Fed minutes did not give gold traders much room to buy. Officials agreed on the quarter-point increase, but not all for the same reason. Some were focused on energy and other price shocks. Others were worried inflation was spreading through demand.

Either way, officials still think inflation is too high. They aren’t ready to let long-term yields carry the tightening.

Governor Christopher Waller said more hikes will likely be needed to bring inflation down, though not necessarily back to back.

FedWatch puts the odds of a hold at the October 28 meeting at 80.6%, with a 19.4% chance of another quarter-point increase. December is a different trade. The market puts 86.3% odds on at least one increase by the December 9 meeting.

December is the date gold has to carry.

Gold Price Forecast

Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.

See all Gold forecastsDaily US Government Bonds 10-Year Yield The 10-year Treasury yield was around 5.30% Thursday after reaching 5.354% Wednesday, its highest level since 2002. The 30-year was near 5.65% after trading just under a 24-year high the day before.

The 10-year auction Wednesday drew strong central-bank demand, but it still cleared at the highest yield since November 2000. Buyers showed up. They demanded a lot of yield to do it.

Treasury sells $22 billion of 30-year bonds Thursday. That is the next test for a market that has been questioning who will own long-dated U.S. debt as deficits grow and oil climbs.

Those same deficit worries are part of why gold has a floor under it. With yields over 5%, nobody’s in a hurry to chase it.

Hormuz Risk Is Supporting Gold, Not Lifting It The Strait of Hormuz is still a risk for the metal. Tanker operators are dealing with more threats and intimidation after Iran warned it could block routes it has not authorized.

That keeps a geopolitical bid under gold. It also helps explain why the market did not collapse after Wednesday’s selloff.

It hasn’t turned the trend, though. Traders are looking at Treasury yields, the dollar and December before they look at the tankers.

Daily Spot Gold (XAUUSD) Technical Analysis Daily Spot Gold (XAU/USD) Spot gold is trading lower Thursday after failing to extend the early rally. The main trend is down according to the daily swing chart. A trade through the main top at $4,399.67 will change the main trend to up. A move through the main bottom at $4,066.54 will reaffirm the downtrend.

The minor trend is down. Wednesday’s high at $4,184.38 is the new minor top. A trade through this level will turn the minor trend up and show that buyers are doing more than reacting to the low.

The first resistance is the long-term 61.8% level at $4,230.51. Above it, resistance comes in at $4,315.81, followed by the 50-day moving average at $4,331.62.

A break through $4,066.54 would expose the main bottoms at $3,996.06, $3,959.80 and $3,942.10. The 61.8% retracement level at $3,886.46 is the deeper downside target.

What to Watch The 30-year Treasury auction is the next live test for gold. The 10-year sale found buyers Wednesday, and the yield still stayed high. The long end and the dollar haven’t backed off, and Thursday’s early buying didn’t survive that.

Spot gold topped at $4,143.43 early Thursday and slipped back toward $4,103.45 by midday in New York. The bias is to the downside while the main and minor trends are down, gold remains under $4,230.51 and the market trades below the 50-day moving average. Buyers need to take out $4,184.38 first. Sellers need $4,066.54 to resume the downtrend.

If you’d like to know more about how to trade gold, please visit our educational area.

Gold traded around 4,130 USD per ounce on Thursday, remaining near its lowest levels since early August, although it is currently making a strong attempt to rebound. Pressure on the metal intensified following the release of the Fed minutes, which kept the prospect of another US rate hike before year-end alive. Elevated oil prices remain an additional factor, keeping inflation risks elevated.

Minutes from the September meeting showed that all 19 FOMC members supported the rate hike. In addition, most participants considered another rate hike before year-end likely to be appropriate.

At the same time, markets largely expect a pause at the October meeting. The probability of a rate hike in December is estimated at around 78%, which continues to limit demand for gold.
Oil, meanwhile, is rising following reports that the Donald Trump administration has asked the Pentagon to prepare options for strikes against Iran, potentially before the mid-term elections. Risks to shipping through the Strait of Hormuz also remain high, despite estimates that Middle East oil supplies have already recovered to pre-war levels.

Technical Analysis

On the H4 chart, gold remains in a downtrend. After forming a corrective range around 4,143 USD, the market attempted to move higher but failed to establish a foothold above resistance. Another downward move is currently developing, with the prospect of testing support at 4,104 USD. A break below this level would open the way for a further decline towards 4,066 USD, with 4,027 USD remaining the main target for sellers. At the same time, a preliminary corrective rise towards 4,215 USD is possible. The MACD indicator confirms that the bearish scenario remains intact: the signal line is below zero, while the histogram remains in negative territory, indicating that sellers continue to dominate.

On the H1 chart, the market completed its local downward move with a test of the 4,066 USD area, after which an upward correction developed. Buyers managed to push the price back above 4,104 USD and test resistance at 4,143 USD. A local consolidation range between 4,126 USD and 4,143 USD is now forming. A rejection from the upper boundary would signal a resumption of the downward move, initially targeting 4,104 USD. A break below this support would open the way for a further decline towards 4,066 USD and then 4,027 USD. The alternative scenario envisages consolidation above 4,143 USD, followed by a corrective move towards 4,171 USD. The Stochastic oscillator is in the overbought zone near 80 and is showing signs of turning downwards. This increases the likelihood that the current correction will end and renewed downward momentum will develop during the upcoming trading session. Selling remains the priority once a reversal from resistance is confirmed.

Conclusion Gold is attempting to rebound but remains under pressure near its early-August lows, weighed down by hawkish Fed minutes and elevated oil prices that are keeping inflation risks elevated. While all 19 FOMC members supported the September rate hike, markets largely expect a pause in October, with the probability of a December rate hike at around 78%. Rising oil prices, amid reports of potential US strikes on Iran, are adding further uncertainty. Technically, gold remains in a downtrend, with support at 4,104 USD and downside targets at 4,066 USD and 4,027 USD if the decline resumes. A corrective rise towards 4,171 USD is possible if the price consolidates above 4,143 USD, but the overbought Stochastic suggests the correction may be nearing its end. The near-term outlook remains bearish unless resistance is decisively broken.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

Gold (XAU) and silver (XAG) prices edge lower in early Asian trading on Wednesday. Gold trades near $4,150 an ounce while silver consolidates around $60.90. The correction in the US dollar on Tuesday supported the recovery in metals but traders remain cautious ahead of the September meeting minutes later today.

The market now expects 20.5% chance of a rate hike in October. But the probability of a December increase remains much higher. The drop in expectations for a rate hike in October supports the metal, but further rate hikes could still limit demand for both metals.

Oil prices also rebounded on Wednesday, with Brent oil rising over $104 a barrel. A developing storm threatens oil facilities in the US Gulf, while renewed attacks in the Middle East keep traders concerned about supply. The high energy prices could add to inflation and strengthen the case for further tightening.

Traders will watch the Fed minutes for clues about how officials weigh these risks. In my view, gold and silver remain vulnerable if the rise in oil prices revives the expectations for higher interest rates.

Gold Price Forecast: $4,100 Support at Risk The daily chart for spot gold shows that the price has been consolidating at the edge of the triangle and remains under bearish pressure. A break below $4,100 will likely open the way for a quick drop towards the $4,000 area.

But a recovery above $4,300 is required to initiate a rebound towards the 200-day SMA at $4,500. The resistance of the triangle now intersects with the 200-day SMA at $4,530. A break above this level will likely open the way for a strong rally towards the $5,000 region. The RSI remains below the midline and continues to drop, which suggests bearish pressure in the short term.

The 4-hour chart for spot gold shows negative price action below $4,300. The price is now consolidating around $4,100. A break below this level will likely trigger a strong drop towards the $4,000 area. The RSI on the 4-hour chart also remains below the midline, which suggests negative price action in the short term.

Gold Price Forecast

Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.

See all Gold forecasts Silver Price Forecast: Break Below $60 Could Expose $55 The daily chart for spot silver also shows a negative price structure below the $72 area. The price failed multiple times in August to break above $68. The RSI remains below the midline, which increases the likelihood of further downside.

A recovery above $64 is required to initiate a rally towards the $72 area. However, the strong US dollar and positive momentum in Treasury yields suggest negative price action in the short term.

A break below $60 will likely push spot silver prices towards the $55 area, but a recovery above $64 is required to push the prices back to $72.

The 4-hour chart for spot silver shows consolidation between $60 and $62.60 in the short term. However, the development of bearish price action below $72 increases the possibility of a breakdown below $60. A break below $60 will open the way for a further drop towards the $55 area.

What to Watch Next for Gold and Silver Traders will watch the Fed minutes for clues about further rate hikes. A strong US dollar could pressure the metals while the increase in oil prices may keep inflation concerns alive. The key support level for gold remains at $4,100. A break below this level could bring $4,000 into view, but a recovery above $4,300 would improve the outlook.

Silver faces a similar test at $60. A break below this level may open the way toward $55. Buyers need to push silver above $64 to support a rebound towards $72. Until both metals regain these resistance levels, the risk of another drop is high.

Read more: Gold and Silver Rebound Faces Risk of a Deeper Drop

The first thing that stands out on Gold’s daily chart is a fresh local low at 4133.

That move allowed sellers to test the important support zone we discussed yesterday:

“(…) Not far below current prices, the bulls have another potential ally: the bullish gap from early August at 4098-4135. This is now the nearest important support zone, and it is additionally reinforced by the 78.6% Fibonacci retracement mentioned above.

That gives this area a realistic chance of slowing the bears down during the coming week.(…)”

And so far, that’s exactly what happened.

The support zone encouraged buyers to step back in, pushing Gold back above the psychological 4200 barrier.

That’s the good news.

The harder part begins now.

Gold is approaching an important resistance combination built around the upper boundary of the black declining channel and the red short-term downtrend line that started in late August.

So, the real question isn’t whether Gold can bounce.

It already did.

The question is whether buyers are strong enough to turn that bounce into something bigger.

Until those resistance lines are broken, we remain in observation mode and wait for price to give us a clearer signal.

What would damage the bullish case? A daily close below 4100 and the loss of the key 4098-4135 bullish gap.

Daily Takeaway

We will watch 4098-4135 support and the resistance lines above the current price.
Hold above support → bulls remain alive → attack on channel resistance stays in play.
Break above the black channel + red downtrend line → first stronger confirmation that buyers are regaining control.

Daily close below 4100 → bullish recovery scenario weakens significantly.

Bounce confirmed. Reversal? Not yet.

Final Thought: today’s Lab has one very clear theme: a reaction is not the same thing as confirmation.

Dollar and Gold are only part of today’s story. Silver, Platinum, Palladium, and Copper are sitting around their own key technical decision zones – and some of them may be very close to confirming their next larger move.

Anna

Gold has recovered towards $4,200, but UBS’s December forecast of $4,600 still requires a gain of almost 10% from current levels. Gold’s sharp September retreat has left a much steeper climb to UBS’s $4,600 year-end forecast, even as bullion recovers some of Monday’s losses.

The Gold price (XAU/USD) edged up 0.20% to around $4,195 an ounce on Wednesday morning, following Tuesday’s 1.49% rebound.

Monday’s 3.20% decline had taken the closing price to roughly $4,125, and bullion remained nearly 6% lower for September through Tuesday.

Rising yields and a stronger Dollar drove the selloff, increasing the opportunity cost of holding an asset that pays no interest.

Wednesday brought some relief as Treasury yields eased and investors scaled back expectations for an October Federal Reserve hike.

UBS’s forecasts, dated 24 September, put gold at $4,600 in December 2026, $5,000 in March 2027, $5,200 in June and $5,400 in September.

That implies gains of approximately 9.7% by year-end and 28.7% by September 2027 from today’s price.

Those projections predate Monday’s slide, rather than representing a fresh response to it.

Image: Gold price chart vs USD shows recovery over last 2 days UBS’s earlier argument gives more weight to reserve diversification and investment demand than to the next interest-rate decision alone.

In its earlier September assessment, the bank said: “We view gold as a strategic portfolio hedge and diversifier, rather than as a tactical expression of the next Fed decision.”

UBS strategist Giovanni Staunovo also wrote on 17 September: “We believe the long-term investment case for gold remains positive,” pointing to central-bank purchases as structural support.

The immediate test is whether softer rate expectations persist through the next US inflation and employment releases.

Stronger figures could lift yields again and test whether central-bank and investment demand can offset renewed pressure on bullion.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

TL;DR: Gold has held its 4,230.70 support through a sharp Treasury yield surge to multi-decade highs, but the real test isn’t whether it can absorb a short-lived spike—it’s whether that support survives a sustained regime with the 10-year yield staying above 5%.

Gold Has Survived the Yield Shock Gold has already survived something that should have hurt much more. Treasury yields have climbed to multi-decade highs, Fed tightening expectations have accelerated, and the Dollar remains firm—yet gold is still holding above 4,230, a key near-term Fibonacci support. The harder test may only be beginning: not whether yields spike, but whether they stay this high.

At around 4,275, gold remains well above the 3,942.43 June low, despite the increasingly hostile rates backdrop. More importantly, this week’s sharp Treasury selloff failed to force a break of 4,230.70, the 61.8% retracement of the rise from 3,942.43 to the 4,697.07 peak. Gold has therefore absorbed both the gradual rise in yields over recent months and the latest abrupt repricing without losing the support that defines its broader corrective structure.

That’s genuine resilience. But it’s not the same thing as renewed strength.

Resilient, but Increasingly Vulnerable The fundamental pressure on gold hasn’t stabilized. Markets are pricing a substantially greater probability of further Fed tightening, the US 10-year yield has pushed above 5%, and the Dollar remains broadly firm. Those forces continue to raise the opportunity cost of holding a non-yielding asset.

The charts reflect that pressure. Gold is trading below both the 4H 55 EMA at 4,326.16 and the daily 55 EMA at 4,337.45, leaving immediate price action capped beneath moving averages on two timeframes simultaneously.

Momentum is also soft rather than exhausted. The 4H RSI at 40.88 and daily RSI at 43.87 are both below 50 but still have substantial room to fall before reaching oversold territory. MACD remains negative on both timeframes, with the deterioration on the daily chart particularly pronounced. In other words, gold’s price structure has held up better than its momentum structure.

That combination preserves the resilient-but-vulnerable framing: bears haven’t broken the level that matters, but bulls haven’t regained control either.

The Harder Test Is Yields Staying High The market question has now changed.

Earlier, the issue was whether gold could withstand rising Treasury yields. It largely has. Even this week’s rapid push in the 10-year and 30-year to multi-decade highs wasn’t enough to break the key support zone.

But a short-lived yield shock and a sustained high-yield regime are different things.

If the 10-year remains above or around 5% while Fed expectations continue shifting toward additional tightening, gold faces a more persistent headwind. A temporary spike can be absorbed. Weeks of elevated yields, a firm Dollar, and expectations of further rate increases would continuously pressure the relative attraction of holding gold.

That’s the test the market hasn’t completed yet.

ActionForex’s Technical View on Gold: 4,230 Is the Line That Matters Technically, the decline from 4,697.07 remains corrective rather than conclusively bearish. Price action has been overlapping and choppy rather than developing into a clean directional collapse, while repeated attempts to push below the low-4,200s have failed.

The key floor remains 4,230.70, with the recent low at 4,234.68 effectively retesting that area.

The importance of this level is asymmetric. A rebound above nearby resistance would show improving momentum, but a decisive break below 4,230.70 would undermine the central resilience argument itself. It would mean the support that survived both the gradual yield climb and the latest rates shock had finally failed. Such a break would reopen the broader 3,942.43 low as the next major downside reference.

Bulls Have Several Hurdles to Clear On the upside, gold first needs to reclaim the 4,326–4,337 area defined by the 4H and daily 55 EMAs. That would ease immediate downside pressure but wouldn’t by itself signal the correction from 4,697.07 is finished.

A more meaningful recovery requires a break above the 4,410 area, followed by the broader 4,410–4,520 resistance zone. A sustained move through that cluster would materially strengthen the case that the corrective phase is ending and put 4,697.07 back into focus.

Until then, rebounds remain vulnerable to selling into resistance. That creates a relatively clean structure:

Above 4,410–4,520, the correction begins to lose control, reopening 4,697.07. Below 4,230.70, the resilience thesis weakens sharply, reopening 3,942.43.

Gold Has Held—Now It Must Prove It Can Keep Holding Gold’s relative stability through the Treasury breakout is noteworthy. The metal hasn’t ignored higher yields—the decline from 4,697.07 makes that clear—but neither has it capitulated despite an increasingly difficult macro backdrop.

That makes gold resilient, but still vulnerable.

The next meaningful signal won’t come from another intraday move around 4,275. It will come from whether 4,230.70 survives a sustained period of Treasury yields above 5%, and whether gold can reclaim both 55 EMAs before rates find another leg higher.

Upcoming US payrolls and CPI could determine whether the rates pressure intensifies or finally eases. If neither changes the Fed narrative, gold may have to prove its support can withstand something harder than a yield shock: a high-yield regime that refuses to go away.

Key Takeaways Gold held 4,230.70 support through a sharp Treasury selloff that pushed the 10-year yield above 5% for the first time in multi-decade highs. Gold’s price structure has held up better than its momentum structure: it’s below both 55 EMAs (4,326.16 4H, 4,337.45 daily) with RSI soft on both timeframes. The real test has shifted from whether gold can absorb a yield spike to whether it can withstand a sustained regime of yields staying above 5%. A break below 4,230.70 would undermine the resilience thesis and reopen the 3,942.43 June low; a break above the 4,410-4,520 zone would instead reopen 4,697.07. Upcoming US payrolls and CPI are the next catalysts that could determine whether rate pressure on gold intensifies or eases.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

Gold Price has recovered towards $4,380, but UniCredit expects higher rates to restrain gains even as central banks and investors support demand. The gold price (XAU/USD) ended Friday near $4,380 an ounce, close to the lower end of UniCredit's revised $4,300-$5,000 forecast range for end-2026.

Bullion gained 0.75% over the week but remained 2.92% lower over the past month, reflecting the uneven recovery from September's lows.

UniCredit retains a neutral to slightly constructive outlook, with higher interest rates limiting how far demand from central banks and investors can lift prices.

Its upper forecast boundary sits roughly 14% above Friday's close, although the bank expects only a modest upward bias.

Image: Gold price vs USD - one month chart Why the cause of rising yields matters The Federal Reserve's quarter-point increase to 3.75%-4.00% sharpened competition from interest-bearing assets and helped drive the Dollar higher against the Euro.

Gold pays no interest, so rising yields increase the income investors forgo by holding it.

UniCredit nevertheless argues that higher long-term yields have different implications depending on what drives them.

A steeper yield curve caused by stronger growth and higher expected equilibrium interest rates would typically weigh on gold.

"However, a steepening driven by fiscal deficits, debt-sustainability concerns and higher term premia can be supportive, particularly if it weakens confidence in the US dollar."

We think this leaves confidence in government finances central to the forecast, alongside the direction of interest rates.

Image: XAU/USD 2026 chart Gold remains only 1.42% higher since the start of 2026 after retreating from its January peak near $5,594.

Even the upper end of UniCredit's December range would leave bullion below that peak, allowing for a recovery without assuming a return to this year's highs.

The bank also sees several sources of continuing demand:

"Sustained central-bank purchases, recovering ETF inflows, portfolio-diversification demand and concerns about preserving purchasing power amid large fiscal deficits and rising public debt continue to provide support."

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

The gold price’s recovery alongside rising inflation expectations has SEB watching for a shift away from the US Dollar and towards hard assets. The gold price in US Dollars climbed back above $4,400 on Thursday, extending Wednesday’s recovery as SEB pointed to renewed interest in protecting wealth against a loss of purchasing power in the Dollar.

At the time of writing, XAU/USD was up 0.70% at $4,424.68, following a 0.97% gain in the previous session.

Analysts at SEB see gold’s strength as part of a wider change in investor behaviour.

“However, it is time to start tracking a broader Dollar debasement narrative. This was a theme in early 2026 and looking at variables such as gold, Bitcoin and implied inflation, they are all rising and would arguably be indicative of a switch to real assets away from the Dollar.”

The bank links this risk to a more interventionist US Treasury, arguing that efforts to restrain borrowing costs through bond buybacks can lift inflation expectations and weaken confidence in the currency.

The US ten-year breakeven inflation rate, a market measure of expected inflation, stood at 2.37% on Wednesday, up from 2.35% late last week.

Higher yields do not tell the whole story Analysts at SEB nevertheless caution against treating rising US Treasury yields as proof that investors are abandoning US government debt.

“Fiscal sustainability concerns as a driver of rates and USD look overblown.”

Its analysis finds that bond pricing does not yet support that conclusion, even as intervention risks strengthen the argument for holding assets outside the Dollar.

That complements UBS’s preference for buying gold on weakness, which rests partly on demand for diversification despite higher real yields.

Image: Gold price vs USD year-to-date 2026 chart At Exchange Rates UK Research we think gold can retain that support even with interest rates elevated, provided concerns about the Dollar’s purchasing power continue to attract buyers.

The immediate test is tomorrow's US consumer-price report.

A strong reading could lift rate-hike expectations and inflation-adjusted yields, increasing the cost of holding gold and testing whether demand for protection against debasement can outweigh that pressure.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.