Gold (XAU/USD) comes under some renewed selling pressure on Thursday, sliding back below $4,050 during the Asian session and snapping a three-day winning streak to the weekly top, touched the previous day. The US Dollar (USD) regains positive traction following Wednesday's post-FOMC corrective slide from a two-week high and turns out to be a key factor weighing on the precious metal.
Technical Analysis
The XAU/USD pair has been trending lower over the past month or so along a downward-sloping channel and keeps a bearish near-term tone below the 100-period Exponential Moving Average (EMA) on the 4-hour chart. Meanwhile, the Moving Average Convergence Divergence (MACD) has turned positive and the Relative Strength Index (RSI) hovers near a neutral region, around 47.5. Improving momentum indicators, however, only hint at a corrective bounce within a broader downside bias defined by the descending channel.
Hence, any attempted recovery is more likely to confront initial resistance near the 100-period EMA at $4,105, followed by a stronger barrier at the channel top around $4,125, where selling pressure could re-emerge. On the downside, the $4,000 psychological mark could act as the next notable support ahead of the lower boundary of the descending parallel channel, around $3,946. A decisive break beneath this floor would reinforce the prevailing bearish structure and open the door to deeper losses in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
In a widely expected move, the US Federal Reserve (Fed) held interest rates steady at the end of the October policy meeting in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a quarter-point hike. Meanwhile, Fed Chair Kevin Warsh signaled during the post-meeting press conference that the central bank remains vigilant against persistent inflation and geopolitical risks. This comes on top of concerns about energy-driven price pressures and underpins prospects for further tightening by the Fed. According to the CME Group's FedWatch Tool, traders are currently assigning around an 80% chance that the US central bank will raise borrowing costs at its December policy meeting. The hawkish outlook, in turn, revives USD demand and contributes to driving flows away from the non-yielding Gold.
Adding to this, fears of a further escalation of tensions in the Middle East underpin the safe-haven Greenback. In fact, The Wall Street Journal reported on Tuesday that US officials have told several Gulf Arab countries to prepare for a short and intense military campaign against Iran after the November 3 midterm elections. On the other hand, Iranian Foreign Minister Abbas Araghchi said armed forces stand ready to defend the country even as Tehran will keep in close contact with intermediaries to give diplomacy a chance. Meanwhile, regional mediators led by Qatar are working to restart negotiations between the US and Iran to prevent the resumption of the war. Separately, US Vice President JD Vance reportedly sent a letter to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, in an effort to revive peace negotiations.
Nevertheless, the geopolitical risks remain in play as furious fighting between the Iran-backed Houthi group and the Saudi Arabia-backed government in Yemen continues. In the latest developments, the Houthis on Tuesday said they had targeted Saudi Arabia's Ras Tanura oil refinery – the biggest in the kingdom – with a ballistic missile. Furthermore, attacks on pumping stations along Saudi Arabia’s East-West oil pipeline earlier this week stoked supply disruption fears and supported crude oil prices. This, in turn, favors USD bulls and suggests that the path of least resistance for the Gold price remains to the downside. Traders, however, might refrain from placing aggressive bets and opt to wait for the release of crucial US macro data – the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index.
XAU/USD 4-hour chart
XAU/USD Forecast Poll
1 Week
- 0%
- Bullish
- 0%
- Bearish
- 100%
- Sideways
1 Month
- 86%
- Bullish
- 14%
- Bearish
- 0%
- Sideways
1 Quarter
- 86%
- Bullish
- 14%
- Bearish
- 0%
- Sideways
Gold (XAU/USD)
In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU.
Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. 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. The United States is the country that holds the biggest resources of Gold in the world.
The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold prices escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher borrowing costs usually weigh on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars. A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Organizations that influence XAU/USD
- WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.
- LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.
- COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.
- CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.
- Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People's Bank of China (PBoC) significantly influence Gold prices through their monetary policies.
People that influence XAU/USD
- Neal Froneman, the World Gold Council's Chairman.
- Scott Bessent, the US Treasury Secretary.
- Xi Jinping, President of the People's Republic of China.
- The London Bullion Market Association members.
Circumstances that influence XAU/USD
The main variables traders should monitor to understand Gold's position are:
- Demand and supply: The balance between global Gold demand and its availability impacts its price.
- Economic uncertainty and currency devaluation: Gold is widely known as a safe-haven asset for investors in periods of economic uncertainty or when a currency faces devaluation.
- Practical applications: The use of Gold in technology innovations, jewelry manufacturing and other industrial applications.
Assets that influence XAU/USD
- Currencies: The US Dollar (USD) and the Euro (EUR) are the primary currencies influencing Gold prices. Other important currency pairs include EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, and USD/CAD.
- Commodities: Silver and Gold are the most important precious metal commodities.
- Bonds: Influential fixed-income securities include the German Bund (a federal government-issued bond) and the US Treasury Note (T-Note).
- Indices: Key indices related to Gold and mining include the HUI (NYSE Arca Gold BUGS), the XAU (Philadelphia Gold and Silver Index) and the GDM (NYSE Arca Gold Miners Index).
- Exchanges: The most important stock exchanges for Gold are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.