FX.co ★ XAU/USD, GOLD

Gold (XAU/USD) was steady on Friday, rising 1.36% to around $4,189 an ounce, after briefly approaching $4,200 – its highest level in a week – but gains stalled as the dollar and U.S. Treasury yields began to stabilize. Earlier on Thursday, the benchmark 10-year U.S. Treasury yield fell sharply by 11.9 basis points, from 5.354% to 5.235%, limiting the dollar's rise and pushing gold, a non-interest-bearing asset, back from a two-month low. Strong institutional demand at the 30-year U.S. Treasury auction also contributed to the decline in yields. Furthermore, President Trump stated on TruthSocial that Washington would not launch a military strike against Iran before the November midterm elections, contradicting earlier reports of an imminent attack. Lower oil prices also helped ease tensions in the fixed-income market. However, the temporary downward pressure on the dollar and U.S. Treasury yields eased on Friday, as underlying macroeconomic factors, including inflation risks stemming from persistently high energy prices and market expectations of interest rate hikes by the Federal Reserve, remained strong. The U.S. dollar index (DXY) rebounded to around 102.30 after hitting a session low of 101.92, while the yield on the benchmark 10-year U.S. Treasury note rose 4.2 basis points to 5.261%, hovering near its highest level in decades. Domestically, the preliminary reading of the University of Michigan Consumer Sentiment Index on Friday showed the overall consumer sentiment index slipping to 46.3 in October from 48.1, below market expectations of 47.6, although the sub-index for consumer expectations rose to 47.3. Meanwhile, household inflation expectations rose slightly, with one-year inflation expectations climbing to 4.7% from 4.6% and five-year inflation expectations rising to 3.5% from 3.4%. According to the CME FedWatch tool, traders generally expect the Federal Reserve to leave its target interest rate unchanged at 3.75% to 4.00% at the Federal Open Market Committee (FOMC) meeting scheduled for October 27-28, with an 85% probability of a 25-basis-point rate hike in December. This expectation has been reinforced by hawkish comments from Fed officials. St. Louis Fed President Alberto Musalem has emphasized the need for further monetary tightening to bring inflation back to the 2% target, and Governor Christopher Waller has stated his support for another rate hike if economic data meets expectations.

From a technical analysis perspective, the price continues to fluctuate within the defined consolidation range of $4,100 to $4,200, trading below a strong overhead support level formed by the 50, 100, and 200-day simple moving averages (SMAs). This compact structure of moving averages suggests that short-term upside remains limited, while the daily Relative Strength Index (RSI) hovers around 44, maintaining a slight downward bias. Meanwhile, the Moving Average Convergence Divergence (MACD) chart remains in negative territory but continues to narrow, indicating weakening selling momentum rather than a decisive trend reversal. On the upside, immediate resistance lies at the psychological level of $4,200, followed by the 100-day moving average ($4,259) and the 50-day moving average ($4,334). Any broader rally would encounter resistance around $4,400, and then the 200-day moving average ($4,529). On the downside, initial support lies at $4100. A sustained break below this level could open a technical path toward a deeper support zone between $4000 and $3950.