Free Forex Signals

• Gold trades on the back foot as higher-for-longer interest rate expectations weigh on demand.
• Markets expect the Fed to hold rates next week before raising them again in December.
• Technically, XAU/USD tests lower Bollinger Band support as selling pressure builds.

Gold (XAU/USD) struggles below $4,100 on Thursday as the US Dollar (USD) rebounds, while energy-driven inflation concerns from Middle East tensions reinforce expectations that interest rates will remain elevated longer. At the time of writing, XAU/USD trades around $4,070 after touching an intraday low of $4,058, its lowest level since August 5.

The New York Times reported that the United States (US) and Israel have drawn up plans for renewed strikes against Iran after the US midterm elections, potentially targeting the country’s energy infrastructure.

Meanwhile, tensions between Saudi Arabia and the Houthis continue to escalate, with fresh attacks reported on Saudi Arabia’s Shaybah oil field and King Fahd International Airport. The US State Department has also ordered non-emergency government employees and their family members to leave Saudi Arabia.

Fresh geopolitical headlines have raised concerns about further disruptions to Middle East energy supplies, pushing Oil prices higher. West Texas Intermediate (WTI) crude rebounds toward $100, up over 2% on the day and trading near five-week highs.

The ongoing energy shock has pushed inflation above central bank targets across major economies, prompting policymakers to raise borrowing costs. Higher interest rates reduce the appeal of the non-yielding metal despite its traditional role as a safe-haven asset and an inflation hedge. The longer the conflict drags on, the longer central banks may need to keep monetary policy restrictive.

Traders now look ahead to next week’s Federal Reserve (Fed) meeting, where the US central bank is widely expected to leave interest rates unchanged after raising them by 25 basis points (bps) in September. Markets will closely watch for clues about the Fed’s interest rate path, as traders price in another rate hike in December, with the CME FedWatch Tool placing the odds at 89%.

These hawkish expectations keep dip-buying interest in the US Dollar intact after its recent correction from multi-month highs, triggered by falling US Treasury yields as concerns over AI-related investments weigh on equities and drive demand for government bonds.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.78 after hitting a three-week low of 101.45. The benchmark 10-year US Treasury yield stands at around 5.03%, down over 1.50% on a daily basis.

Despite the recent decline, US Treasury yields remain elevated, and combined with a stronger US Dollar and prospects of higher interest rates, Gold is likely to remain on the back foot, with any recovery likely to attract fresh selling interest.

Technical analysis: XAU/USD tests lower Bollinger Band

On the daily chart, XAU/USD tests the lower Bollinger Band near $4,069, while trading below the 20-period Simple Moving Average (SMA), which forms the middle Bollinger Band around $4,153, keeping the near-term bias tilted to the downside.

The Relative Strength Index hovers in the high-30s, hinting at lingering downside pressure, while the Moving Average Convergence Divergence (MACD) stays marginally positive but has rolled over, suggesting that recent recovery momentum is fading rather than strengthening.

On the upside, initial resistance is seen at the 20-period SMA near $4,153, followed by the upper Bollinger Band around $4,237. A sustained break above these levels could open the door toward $4,400, followed by the $4,500 psychological mark.

On the downside, immediate support lies at the lower Bollinger Band near $4,069. A clear break below this level could expose the $4,000 psychological mark, followed by the June lows around $3,950.

• Gold sinks to over two-month low as higher-for-longer interest rate expectations weigh
• Gold Price Forecast: XAU/USD tests key support at $4,070 amid high Oil prices
• Euro gives up early gains amid higher oil prices, French fiscal risks
• Gold bears await $4,100 break amid oil-driven Fed hike bets and USD uptick
• Gold rebounds as Oil reverses sharply on positive US-Iran headlines