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Gold sticks to intraday bearish tone below $4,100 amid Fed hike bets

FXStreet · 2026-10-22T04:23:32Z
Gold sticks to intraday bearish tone below $4,100 amid Fed hike bets
  • Gold attracts fresh sellers on Thursday amid firming expectations for a December Fed rate hike.
  • Falling US bond yields keep USD depressed, though it fails to lend any support to the commodity.
  • Geopolitical risks favor USD bulls, backing the case for further depreciation for the XAU/USD pair.

Gold (XAU/USD) struggles to capitalize on a modest bounce from the monthly trough, retaining its intraday bearish tone below $4,100 through the first half of Thursday’s European session. US Dollar (USD) selling bias remains unabated as Federal Reserve (Fed) officials recently signaled there is no urgency to raise interest rates at the upcoming October 27–28 meeting. Furthermore, US bond yields extend their retracement slide from multi-year highs, keeping USD bulls on the back foot and offering some support to the precious metal.

Meanwhile, US inflation figures, released last week, reaffirmed bets for an imminent Fed rate hike. In fact, the CME Group's FedWatch Tool indicates that traders are pricing in around a 90% chance that the US central bank will raise borrowing costs in December. Furthermore, inflation fears stemming from volatile oil prices underpin prospects for further policy tightening by the Fed, which continues to weigh on the non-yielding Gold. Moreover, geopolitical risks could limit losses for the safe-haven buck and cap the commodity.

In the latest developments surrounding the Middle East crisis, Iran’s Foreign Minister, Abbas Araghchi, stated that the country is prepared for diplomacy while also emphasizing its readiness to defend itself. Araghchi added that there was little reason to expect progress now as the US had shown no willingness to reach an understanding. Separately, The New York Times reported that the US and Israel have drawn up plans for a short but intense military campaign against Iran after the US midterm elections. This favors USD bulls.

Moreover, the XAU/USD pair now seems to have found acceptance below the $4,100 round figure, which further backs the case for an extension of the depreciating move. Traders now look to Thursday's release of the US Weekly Initial Jobless Claims data for some impetus ahead of the global flash PMIs on Friday, though the focus remains on the FOMC meeting next week.

XAU/USD 4-hour chart

Chart Analysis XAU/USD

Technical Analysis

The XAU/USD pair is keeping a bearish near-term tone below the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the Moving Average Convergence Divergence (MACD) indicator remains in negative territory with the line below its signal, while the Relative Strength Index (RSI) hovers in the mid-30s. Momentum indicators together suggest persistent downside pressure even as conditions approach oversold territory.

Any further decline, however, could find some support near the $4,075-$4,065 region, or the monthly swing low. Some follow-through selling will be seen as a fresh trigger for bearish traders and make the Gold price vulnerable to accelerating the fall further towards the $4,030-$4,025 intermediate support en route to the $4,000 psychological mark.

On the flip side, the $4,140 area could act as an immediate hurdle, above which the precious metal could make a fresh attempt to conquer the $4,200 mark. A sustained strength beyond the said handle could lift the Gold price to the 200-period SMA at $4,232, which, if cleared, would ease the current bearish pressure and open the door to a more meaningful corrective bounce.

(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.