Global gold prices rebounded during Wednesday’s trading session (October 21), following a period of pressure driven by mounting concerns over global inflation. Spot gold (XAU/USD) rose 0.3% to US$4,138.17 per troy ounce as of 20:28 WIB, while gold futures climbed 0.3% to US$4,156.25 per troy ounce. This recovery coincided with a decline in global oil prices, which eased concerns regarding inflationary pressure in the United States (US). Nevertheless, gold remains down by more than 1% since the beginning of the week and has lost approximately 20% of its value since the conflict involving Iran erupted in late February.
The weakening of oil prices served as a catalyst for gold’s recovery, with Brent crude falling 0.5% to US$108.28 per barrel. This drop followed reports that oil exports from the Gulf region have returned to near pre-war levels, supported by the US securing shipping lanes through the Strait of Hormuz. However, geopolitical tensions persist, fueled by reports suggesting that Israel might launch another major offensive against Iran. Consequently, both oil and gold prices remain highly sensitive to shifts in market sentiment—particularly as energy costs threaten to keep inflation elevated, reinforcing expectations for a restrictive interest rate policy.
Investor attention is now focused on the upcoming Federal Reserve meeting, scheduled for October 27–28, 2026. The market largely anticipates that the Fed will hold interest rates steady, with the probability of a 25-basis-point hike estimated at less than 17%. Meanwhile, the likelihood of a rate hike in December remains around 75%, reflecting ongoing concerns that US inflation continues to hold above the 2% target. High interest rate expectations pose a challenge for gold, as the precious metal does not offer a yield. Investors will also be closely monitoring movements in the US dollar, US government bond yields, and developments regarding the conflict in the Middle East to determine whether gold’s upward momentum can be sustained.
Commentary
The recovery in gold prices toward US$4,138 suggests that the decline in oil prices is beginning to provide room for gold to rebound, though it is not yet sufficient to fully reverse the preceding downward trend. The market is currently facing two conflicting sentiments: easing energy prices could potentially reduce inflationary pressure and expectations for interest rate hikes, while the conflict involving Iran could still trigger sharp volatility in the commodities market.
From a technical perspective, the US$4,150 area serves as the nearest resistance level to watch. If gold manages to break through and hold above this level, it could open the door for a recovery toward the US$4,180–4,200 range. Conversely, a failure to sustain these gains could lead the price to retest support levels between US$4,120 and US$4,100 per troy ounce. These levels are provided for technical monitoring purposes and do not represent guaranteed price targets.