Solid Gold Futures – Global gold prices remained under pressure during Thursday’s (Oct 22) trading session. XAU/USD failed to capitalize on a rebound from its monthly low, continuing to trade below US$4,100 per troy ounce. Selling pressure persists, even as the US dollar and Treasury yields have weakened.
The US dollar remains under pressure after several Federal Reserve officials indicated there is no urgency to raise interest rates during the October 27–28 meeting. US government bond yields have also continued to correct from multi-year highs, providing some marginal support for gold.
However, persistently high US inflation keeps the likelihood of a December rate hike significant. The market currently estimates a roughly 90% probability that the Fed will raise rates by the end of the year; consequently, the prospect of a tighter monetary policy continues to weigh on gold, an asset that yields no return.
Inflationary concerns are further compounded by volatility in global oil prices. Rising energy costs could keep price pressures elevated, strengthening the case for the Fed to maintain a restrictive policy for longer—even if the central bank is expected to hold rates steady at its October meeting.
On the other hand, geopolitical tensions in the Middle East may limit any further decline in gold prices. Iranian Foreign Minister Abbas Araghchi stated that Tehran remains open to diplomacy but is also prepared to defend itself. Meanwhile, reports regarding potential US and Israeli military plans concerning Iran—following the US midterm elections—have bolstered demand for safe-haven assets.
From a technical perspective, the price remaining below US$4,100 increases the risk of further weakness should the selling pressure fail to subside. The market is now awaiting US initial jobless claims data, global PMI figures, and next week’s FOMC meeting. These events will serve as key catalysts in determining whether gold can break back above US$4,100 or if it will continue its downward trend. (srh)