FX.co ★ Crude | XAU/USD, GOLD

Gold (XAU/USD) stabilized above the psychological $3,900 level during Asian trading on Friday, snapping a three-day losing streak that had seen the metal fall to its lowest point since late September. This recovery is primarily driven by a pause in the rally of the US Dollar (USD), which had strengthened for three consecutive days, reaching its highest level since April 2025—a 19-month peak. Although gold has regained some momentum, the underlying fundamentals remain firmly in place: heightened expectations for interest rate hikes by the Federal Reserve, combined with ongoing geopolitical instability in the Middle East, continue to bolster the US Dollar and limit the potential for significant gains in gold, a non-yielding asset. A key source of pressure on precious metals stems from Tuesday’s US Consumer Price Index (CPI) data for October, which came in higher than anticipated. This prompted several influential Federal Reserve policymakers to adopt a hawkish tone, leading traders to anticipate a more aggressive path for monetary policy tightening. According to the CME Group’s FedWatch tool, the money market has fully priced in a 25-basis-point interest rate hike for the Federal Open Market Committee (FOMC) meeting in December, with a roughly 13% probability assigned to a 50-basis-point increase. Furthermore, a sudden surge in global oil prices has further exacerbated concerns regarding inflation. Driven by the cumulative effect of hawkish expectations regarding interest rate hikes, U.S. Treasury bonds faced further sell-offs, with the yield on the benchmark 10-year Treasury note breaching the 5.00% threshold—a development that bolstered the dollar’s yield advantage. Meanwhile, persistent and intense geopolitical turmoil in the Middle East has fueled market demand for the dollar as a "safe-haven" asset, while keeping energy-related inflationary risks elevated. On Thursday, U.S. President Donald Trump issued a stern warning to Tehran, stating that any party carrying out attacks against U.S. officials would "disappear," and reaffirmed his readiness to authorize further military operations if necessary. On the "Truth Social" platform, Trump reiterated his hardline stance, asserting that the United States has no need for a diplomatic agreement with Iran and declaring that the window for such negotiations had long since closed. Concurrently, attacks on Saudi energy infrastructure and commercial vessels navigating the strategically vital Strait of Hormuz continue; this rise in the geopolitical risk premium supports a bullish outlook for the U.S. dollar while exerting persistent downward pressure on gold prices. Looking ahead to the remainder of Friday, market participants are closely monitoring the release of the U.S. Producer Price Index (PPI) for October, as well as scheduled remarks from several senior officials of the Federal Open Market Committee (FOMC). Furthermore, any new geopolitical developments could trigger significant volatility across global markets. Although gold prices remained relatively stable at the start of Friday’s trading, spot gold (XAU/USD) is still expected to post a notable decline for the week. From a macroeconomic perspective, any recovery in gold prices is likely to encounter strong selling pressure. The four-hour technical chart shows that gold prices faced repeated resistance near the $4,150 level before retreating, clearly breaking below the 100-period exponential moving average (EMA)—a signal that the short-term downtrend remains intact. Momentum indicators further confirm this bearish bias: the 14-period Relative Strength Index (RSI) is hovering around 35.43, nearing oversold territory, while the Moving Average Convergence Divergence (MACD) indicator sits in negative territory (at approximately -15.22). This suggests that, despite early signs that the downward momentum might be exhausting, the market remains under selling pressure. Consequently, should gold prices attempt a rebound, they will immediately face resistance near $3,960, with the psychological level of $4,000 and the 100-period EMA at $4,037.06 looming above. For a more significant corrective wave to take hold—targeting $4,100 and $4,150—buyers would need to reclaim these key levels. On the downside, the $3,865–$3,855 price range (the lowest level since the beginning of the year) serves as a key support level; a break below this support would suggest that the downtrend that began in August could persist for longer.