FX.co ★ Fixy | XAU/USD, GOLD

Gold (XAU/USD) extended its losses falling 0.37% to close near $4,157 an ounce. A strong rebound in U.S. Treasury yields offset the overall weakness of the dollar. The benchmark 10-year U.S. Treasury yield rose 6 basis points to 5.223%, putting further pressure on non-yielding gold, even as the dollar index (DXY) fell more than 0.32% to 102.24. This divergence highlighted the temporary breakdown of the positive correlation between the dollar and oil prices, with West Texas Intermediate (WTI) crude rising more than 1% to near $94.20 a barrel amid escalating tensions in the Middle East. Geopolitical tensions remain high as Tehran intensifies its campaign against shipping near the Strait of Hormuz, coupled with President Trump's public warnings of imminent policy action against Iran, while simultaneously praising the U.S. naval presence in the region. On the US economic front, the four-week moving average of job gains, according to ADP data, dipped slightly from 25,250 to 24,750. Meanwhile, existing home sales rose 1.5% month-over-month in September to 3.99 million units, reinforcing Federal Reserve officials' earlier assessments that domestic economic activity and labor market conditions remain stable. The hawkish statements from central bank officials continued to bolster market expectations of further monetary tightening, potentially supporting sovereign bond yields but also putting pressure on gold prices. Chicago Federal Reserve President Austin Goolsbee indicated that with strong economic growth and a balanced labor market, persistent inflation clearly warrants further action from the Fed. Similarly, Federal Reserve Governor Christopher Waller asserted that the widespread issuance of corporate bonds linked to artificial intelligence investments has boosted yields while simultaneously helping to moderate demand. Current financial market indicators tracked by Prime Terminal point to a 23% probability of a 25-basis-point interest rate hike at the Federal Open Market Committee (FOMC) meeting scheduled for October 27-28. Investors are closely watching the upcoming release of the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as speeches by Federal Reserve Chair Kevin Warsh.

From a technical analysis perspective, the (XAU/USD) is showing a clear downward trend after failing to break through the key psychological resistance level of $4,200. Following this failure, the spot price fell to a weekly low near $4,150, and technical indicators have reinforced the bearish bias, with the 14-day Relative Strength Index (RSI) falling below the neutral level of 50. On the downside, the immediate structural support level for gold lies at the weekly low of $4,150, followed by the psychological level of $4,100. A break below $4,100 could lead to further declines towards secondary support levels such as $4,050, the July 29 low of $3,996, and the key psychological level of $4,000. Conversely, for a genuine bullish reversal, gold needs to break strongly above $4,200 to open a technical path towards the next moving average resistance levels, including the 100-day simple moving average at $4,252, the 50-day simple moving average at $4,339, and the 200-day simple moving average at $4,522.