FX.co ★ XAU/USD, GOLD

Gold prices (XAU/USD) rose by more than 1.40% on Friday, benefiting from lower US Treasury yields and a weaker dollar. After rebounding from an intraday low of $4,130, gold traded around $4,194. This upward momentum was primarily driven by US macroeconomic data, which showed a significant decline in US consumer confidence. The University of Michigan's consumer sentiment index fell to 46.3 in October from 48.1, below market expectations of 47.6. Meanwhile, inflation expectations for one year and five years were revised slightly upward to 4.7% and 3.5%, respectively, suggesting that consumer spending may face challenges, despite Federal Reserve officials' insistence that the overall economic and labor market structures remain strong. Furthermore, the recently released minutes of the Federal Open Market Committee (FOMC) meeting confirmed broad support for tightening monetary policy, but also highlighted internal disagreements about whether the interest rate hikes were precautionary or signaled a continuation of the rate-hiking cycle. This situation has led the financial markets to believe that the Federal Reserve will leave interest rates unchanged at its next meeting in October. Despite hawkish statements from Federal Reserve Chairman Christopher Waller and St. Louis Fed President Alberto Musallem, emphasizing the need to continue addressing persistent inflation, the financial markets currently anticipate an 81% probability that the federal funds rate will remain unchanged in the 3.75% to 4.00% range in October, with a similar 81% probability of a 25-basis-point rate hike in December. In global markets, the yield on the benchmark 10-year US Treasury note edged up slightly to 5.248%, and the US Dollar Index (DXY) rose 0.18% to 102.30, somewhat limiting the recovery in gold prices. Meanwhile, geopolitical tensions in the Middle East continue to inject a stable safe-haven premium into asset valuations. Despite US President Trump's clarification that Washington will not launch a military strike against Iran before the midterm elections, maritime disputes around the Strait of Hormuz and Houthi mine-laying activities in the Bab el-Mandeb Strait continue to disrupt commercial shipping, prompting gold investors to focus on upcoming energy prices, US Treasury yields, and US inflation, retail sales, and employment data. Technically, gold's overall downward trend is facing renewed pressure. Spot gold prices rose to an intraday high of $4,207 before retreating back below the key psychological level of $4,200. Momentum indicators suggest a slight upward shift in gold prices, with the Relative Strength Index (RSI) rising but remaining below the 50 level. A strong close above $4,200 on both the daily and weekly charts would reinforce expectations of a structural recovery and open a technical path towards resistance near the 100-day simple moving average ($4,260), followed by the 50-day moving average ($4,335), then $4,500, and finally the 200-day moving average ($4,529). Conversely, if sellers regain control of the market and push prices below $4,150, immediate support would be found around $4,100. Should prices decline further, they could encounter psychological support at $4,050, the session low of $3,996 on July 29, and the key level at $4,000.