FX.co ★ XAU/USD, GOLD

Gold prices rebounded from their recent low of around $4,067 during Friday's Asian trading session, targeting the psychological level of $4,200, while the dollar also retreated from multi-month highs. Market participants unwound their long dollar positions ahead of the upcoming long weekend in the US and are closely watching key inflation indicators due soon. The upcoming Consumer Price Index (CPI) data is crucial in determining whether the market has fully priced in the Federal Reserve's October interest rate hike and whether a December rate increase remains a possibility. In addition to profit-taking on the dollar, lower US Treasury yields and weaker oil prices have provided structural support for gold prices, as investors generally believe the previous bond market correction was overdone. US President Trump stated that Washington is engaged in productive diplomatic consultations with Iran and confirmed there are no plans for military strikes before the November 3 midterm congressional elections, allaying earlier alarming reports and easing public concerns about inflation. As a result, oil prices remain under downward pressure. Therefore, weekend trading trends, upcoming US Treasury yield data, and preliminary readings of the University of Michigan's Consumer Confidence Index and Inflation Expectations Index will determine whether gold achieves its first weekly gain in three weeks. Technically, the gold price is trading on the daily chart at around $4,174.76. With the spot price continuing to fall below key moving average resistance levels, the short-term trend remains bearish. Key resistance levels above gold are the 100-day simple moving average (SMA) at around $4,259.87, the 50-day SMA at around $4,334.80, and the significant 200-day SMA at around $4,529.19, suggesting that the current rebound is still in a general structural market correction phase. Meanwhile, the 14-day Relative Strength Index (RSI) is hovering around 44, a slightly negative level, suggesting that even if gold stabilizes above the recent lows, downward pressure will persist. On the downside, the ascending trendline around $4001.53 represents immediate structural support. A break below this key support level would exacerbate the bearish technical outlook and could trigger a deeper correction. However, if the support level holds, further declines to the upper moving average resistance level remain possible.