Global gold prices remained under pressure during Friday’s trading session (October 23, 2026), even as the metal managed to climb back above the psychological level of US$4,000 per troy ounce, following a dip to a three-month low. Spot gold (XAU/USD) struggled to sustain its recovery momentum during the European session, weighed down by a strengthening US dollar and mounting expectations of interest rate hikes by the Federal Reserve.
Although several Fed officials have signaled that there is no immediate urgency to raise rates, market participants still assign an approximately 80% probability that the US central bank will tighten monetary policy further in December. This outlook dampens the appeal of gold, as higher interest rates increase the opportunity cost of holding a precious metal that yields no interest.
Pressure on gold has been compounded by a surge in global oil prices, which has fueled concerns regarding global inflation. Crude oil prices remain near one-month highs, driven by escalating geopolitical tensions in the Middle East. The conflict between Saudi Arabia and the Iranian-backed Houthi group has intensified following a series of drone and missile attacks targeting the kingdom’s airports and strategic energy infrastructure.
Meanwhile, Iran’s Revolutionary Guard has warned that any new attacks by the United States could trigger a broader military response, potentially extending to neighboring countries and bases utilized for US military operations. Reports of possible follow-up military actions by the US and Israel against Iran—following the November midterm elections—have further heightened regional uncertainty. While geopolitical conflict typically bolsters demand for gold as a "safe-haven" asset, the risk of energy-driven inflation has instead reinforced expectations for a tighter monetary policy, thereby capping any gains for the precious metal. Investor attention is now focused on the upcoming Federal Open Market Committee (FOMC) meeting on October 27–28, during which the Federal Reserve is expected to keep its benchmark interest rate unchanged. The market will be closely monitoring the policy statement and the press conference—to be held by Fed official Kevin Warsh—for clues regarding the direction of interest rates in December.
Additionally, the preliminary report on U.S. economic growth for the third quarter, along with data on Personal Consumption Expenditures (PCE) inflation—the Fed’s preferred inflation gauge—is scheduled for release on October 29. Both datasets are expected to provide a clearer picture of the resilience of the U.S. economy and the evolution of price pressures. As long as expectations for interest rate hikes remain high and the U.S. dollar continues to strengthen, gold prices are likely to remain under pressure, though the possibility of a technical recovery remains should market sentiment begin to shift.
Conclusion
Gold’s movement, currently hovering around US$4,000, suggests that bearish sentiment has not yet fully dissipated, even as prices show signs of attempting a recovery from a three-month low.
From a fundamental perspective, three key factors are capping gold’s upside: expectations of a Federal Reserve rate hike in December, high oil prices that amplify inflationary risks, and the U.S. dollar’s recovery from a three-week low.
Technically, the US$4,000 level serves as an important psychological support. Should the price fail to hold this level, selling pressure could persist toward US$3,950. Conversely, if gold manages to regain strength and break through the US$4,050–4,100 range, the potential for a short-term recovery could increase. These levels should be viewed as points to monitor rather than definitive price targets.
Primary market focus: The Federal Reserve’s decision on October 28, followed by the release of U.S. GDP and PCE inflation data on October 29, will serve as critical catalysts for the future direction of gold. As long as The Fed maintains a hawkish stance, the potential for gold to strengthen may remain limited.