FX.co ★ XAU/USD, GOLD

Gold (XAU/USD) continued to face downward pressure during Thursday's Asian trading session, struggling to maintain its modest intraday gains and trading below $4,150. The US dollar (USD) maintained its strong upward momentum, directly supporting gold prices and keeping market participants on edge as gold sought to extend its gains after rebounding from overnight lows. The release of the minutes from the September 15-16 Federal Open Market Committee (FOMC) meeting weighed heavily on gold's fundamentals. The minutes showed that members voted unanimously to raise the target range for the federal funds rate and signaled clear support for further monetary tightening. While the overall hawkish tone suggests that most participants believed another rate hike before the end of the year was appropriate to address persistent inflation, this did not immediately dispel market expectations that the Fed would pause rate increases at its next meeting in October, providing only short-term and insignificant support for gold. Meanwhile, CME Group’s FedWatch tool shows that traders still expect a roughly 80% probability of the Federal Reserve raising borrowing costs in December, reinforcing the dollar’s structural advantage. Furthermore, persistent market concerns that domestic inflation will be more persistent than anticipated amid volatile energy prices have strengthened the dollar and kept US Treasury yields near multi-year highs. This macroeconomic situation is exacerbated by ongoing geopolitical tensions, particularly the military conflict in the Middle East and the Pentagon’s recent directive to US Central Command to finalize preparations for a resumption of large-scale military operations in Iran. The geopolitical volatility stemming from President Trump’s consideration of a possible timeline for strikes—perhaps before upcoming domestic and regional elections—further enhances the dollar’s safe-haven appeal, limiting significant gains in gold prices. Therefore, sustained and strong buying remains crucial to confirming whether gold has clearly bottomed out or whether sellers will exploit pullbacks as better entry points. The market's focus is currently entirely on the upcoming weekly US jobless claims data and speeches from key Federal Reserve officials, both of which will undoubtedly influence the short-term direction of the US dollar and asset market sentiment.

Technically, daily chart briefly demonstrated some resilience below the 78.6% Fibonacci retracement level of the June-August rally, but it still maintains a clear short-term bearish bias below the important daily simple moving average. Fundamental momentum indicators remain fragile and heavily biased to the downside, with the Relative Strength Index (RSI) hovering around 40 and the Moving Average Convergence Divergence (MACD) in negative territory. Taken together, these technical indicators suggest that even in the absence of oversold conditions, selling pressure remains dominant. Therefore, any further decline is expected to encounter strong resistance at the 61.8% Fibonacci retracement level near $4,233, followed by the 50% retracement level at $4,320, and then the key 50-day simple moving average at $4,332, forming a strong multi-level supply zone. Additional resistance lies at the 38.2% retracement level near $4,408 and the 23.6% retracement level near $4,516. Conversely, immediate support is found at the 78.6% Fibonacci retracement level near $4,108; a break below this level could lead to further declines towards the cycle lows near $3,949.