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Gold refreshes weekly low, below $4,150 as traders look to US CPI for Fed rate cuts

FXStreet · 2026-10-14T04:09:37Z
Gold refreshes weekly low, below $4,150 as traders look to US CPI for Fed rate cuts
  • Gold hovers around $4,150 as USD extends its retracement slide from an 18-month high.
  • Energy-driven inflation risks lift Fed rate hike bets, cap the upside for the non-yielding bullion.
  • Traders also seem hesitant ahead of the latest US inflation figures and Fed Chair Warsh’s speech.

Gold (XAU/USD) trades with a negative bias for the third straight day, touching a fresh weekly low during the first half of Wednesday’s European session. The commodity, however, remains confined in a two-week-old range as traders await the latest US inflation figures before positioning for a firm near-term direction. The US Consumer Price Index (CPI) is due for release later today, followed by the Producer Price Index (PPI) on Thursday. Moreover, US Federal Reserve (Fed) Chair Kevin Warsh's speech at the annual IMF and World Bank meetings in Bangkok on Friday will be scrutinized for cues about the future policy path. The outlook, in turn, will play a key role in driving the US Dollar (USD) and provide some meaningful impetus to the non-yielding yellow metal.

In the meantime, the CME Group's FedWatch Tool indicates that traders are assigning a nearly 90% chance that the US central bank will raise borrowing costs again at its December policy meeting. The bets were lifted by the recent hawkish comments from influential FOMC members, signaling openness to additional interest rate hikes before the end of the year amid persistent price pressures. Moreover, worries about energy-driven inflation risks underpin prospects for further Fed tightening, which might continue to act as a headwind for gold. In fact, crude oil prices rose to a nearly two-week top amid supply concerns due to escalating conflicts in the Middle East.

Fighting between the Iran-allied Houthis and Saudi Arabia has intensified over the past week in retaliation for the kingdom's support of ‌Yemeni government forces. Moreover, Houthi energy terminals and fuel reserves in Yemen were reportedly struck by a Saudi-led coalition. Meanwhile, tensions between the US and Iran also continued to simmer amid the standoff over the Strait of Hormuz. In fact, US Central Command rejected claims by the commander of Iran’s Islamic Revolutionary Guard Corps Navy that the strategic waterway is under Iran’s control and that any approaching US Navy warships would be sunk. This keeps the geopolitical risk premium firmly in play.

The USD, however, struggles to attract any meaningful buyers, trading below its highest level since April 2025, which should offer some support to gold. Nevertheless, the aforementioned bearish fundamental backdrop suggests that the path of least resistance for the XAU/USD pair remains to the downside. That said, a sustained breakout through a short-term trading range held over the past two weeks or so could shift the near-term bias in favor of bullish traders.

XAU/USD 4-hour chart

Chart Analysis XAU/USD

Technical Analysis

Barring last week's knee-jerk fall to a two-month low, the range-bound price action might be categorized as a bearish consolidation phase against the backdrop of a decline from the August swing high. The Gold price, however, holds just above the 78.6% Fibonacci retracement at $4,115, suggesting a tentative floor. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator stays in negative territory with a slightly contracting bearish histogram that hints at fading downside pressure. The Relative Strength Index (RSI) around 50 points to neutral momentum, reinforcing the idea of consolidation within a broader corrective phase rather than a fresh bullish leg.

Hence, any subsequent move up might continue to face stiff resistance at the 100-period Simple Moving Average (SMA) on the 4-hour chart, at $4,193. This is followed by the top boundary of the trading range, near the $4,215-$4,220 region, and the 61.8% Fibo. retracement at $4,238, with further barriers seen at $4,325, corresponding to the 50.0% retracement level. Above these, the 38.2% retracement at $4,412 and the 23.6% retracement at $4,519 mark progressively stronger supply zones. On the downside, immediate support is seen at the 78.6% retracement at $4,115, ahead of the prior cycle low area at $3,957.83. A sustained break below $4,115 would likely open the door for a deeper slide toward that lower structural base.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. 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. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.