FX.co ★ Der | XAU/USD, GOLD

Gold (XAU/USD) prices found buyer demand marginally below the $4,000 level during Monday's Asian trading session, starting the Federal Reserve's monetary policy week on a slightly positive note. Despite modest intraday gains to around $4,011, the precious metal remains structurally fragile and continues to trade uncomfortably near the three-month low of $3,975 per ounce reached on Friday. Market participants are primarily focused on the conclusion of the Federal Open Market Committee (FOMC) policy meeting on Wednesday. Indicators from the CME FedWatch tool point to an overwhelming consensus that the central bank will keep its benchmark interest rate unchanged within the target range of 3.75% to 4.00%, further emphasizing the strategic importance of forward guidance. Macroeconomic sentiment continues to be influenced by recent public communications from Fed officials, who have indicated that underlying inflationary pressures remain stubborn and persistent, requiring monetary policy to remain tight for an extended period to anchor long-term price expectations. Federal Reserve official Beth Hammack delivered a somewhat hawkish assessment, with the FXS Speechtracker rating falling to 7.2/10, just below the historical average of 7.6/10, highlighting persistent upside risks to inflation. Hammack emphasized the burden of rising prices on low-income households, along with mounting evidence of rising input costs, in a clear warning about an emerging “inflationary mindset” among consumers and businesses. This concern about entrenched expectations points to a structural bias against monetary tightening, especially as policymakers acknowledge that broader financial conditions may not be tight enough and that the true neutral rate remains uncertain. Reflecting these communications, the FXS Fed Confidence Index slipped 0.25 points to 127.92. Despite the slight decline, the index remains well above the neutral baseline of 100, underscoring the central bank’s still firmly hawkish stance. In addition to the Federal Reserve's policy statement, this week's focus will be on preliminary US Q3 GDP data, the Personal Consumption Expenditures (PCE) price index, and earnings reports from tech giants Amazon, Alphabet, and Microsoft. Organizational analysis from OCBC highlights gold's recent underperformance, noting that the precious metal has faced persistent selling pressure even during periods of low US Treasury yields. OCBC strategists emphasized that the rise in Brent crude prices, driven by supply disruptions and escalating geopolitical tensions in the Middle East, has reignited global inflation concerns and increased expectations of longer-term central bank tightening. Notably, gold continued its downward trend even as bond yields fell sharply amid a broad sell-off in tech stocks, underscoring the metal's muted response to factors that have traditionally supported safe-haven assets. OCBC stressed that lower yields and heightened geopolitical tensions have failed to generate sufficient buying confidence, indicating fragile underlying market sentiment. As a result, analysts remain cautious about the near-term outlook, emphasizing that gold needs to respond more convincingly to easing financial conditions to confirm a sustained market bottom. From a daily technical chart perspective, the XAU/USD pair is trading near $4,011.06, maintaining a clear bearish structure in the near term as spot prices remain capped by the 20-day exponential moving average (EMA) at $4,136.22. This key short-term moving average continues to act as dynamic resistance, maintaining a sequence of lower highs and lower lows. Momentum indicators are in line with this overall bearish trend; the 14-day Relative Strength Index (RSI) is hovering near the lower end of its range, close to 35.06, reflecting continued selling pressure but without an immediate trigger for oversold conditions. On the upside, initial technical resistance is seen at the 20-day exponential moving average at $4,136.22, which buyers must decisively reclaim to negate the bearish momentum and pave the way for a structural recovery. Conversely, on the downside, key structural support lies at the swing low recorded on June 30 at $3,941.76; a clear break below this major bottom would expose deeper downside targets, namely the psychological level of $3,900.