Gold Daily Forecast On Friday, gold (XAU/USD) is trading near its lowest level since early in the year ($3,941). While the precious metal should benefit from today's risk-off environment as weak tech earnings raise doubts about AI spending, the prevailing theme remains Fed tightening, pushing the price below its yearly pivot point of $3,941 and setting gold up for a monthly loss. As I type this update, XAU/USD is trading near $3,941, down about 1.60%. Traders are turning more cautious amid poor technology earnings, raising concerns about whether high investment in artificial intelligence will produce adequate profits. As a result, capital flows toward Treasury bills, pushing US Treasury yields lower and dragging the USD even lower. Currently, the US Dollar Index (DXY), which monitors the greenback's performance versus a selection of six other leading world currencies, hovers around 101.65. Another headwind weighing on digital assets is news of a major security breach at the world's largest cryptocurrency exchange, Binance. Despite current bearish sentiment, gold continues to struggle to capitalize on safe-haven demand as oil prices rise amid geopolitical tensions between Western nations and Iran. Rising energy costs may mean higher-than-target inflation readings and subsequent rate hikes. Some analysts believe that gold investors are liquidating their holdings to fund other positions under pressure. The WTI crude benchmark currently sits above $103 per barrel, marking new highs since May. Speculation about an escalation of conflicts between the US and Iran increases after next week's US mid-term election results. Thursday's data showed a 0.5% and 3.6% rise in headline Personal Consumption Expenditures (PCE) inflation MoM and YoY in September. Meanwhile, core inflation jumped 0.3% MoM and 3.1% YoY. According to the CME FedWatch Tool, there is a 75% probability of a rate hike in December, following the decision not to raise rates at the October meeting. As expected, higher yields will likely put pressure on gold because it pays no interest. In particular, analysts at ING expect remarks from three Federal Reserve officials: Thomas Barkin, Mary Daly, and Alberto Musalem. Nevertheless, the team does not expect any significant revelations because "it is clear the market has priced in a December rate hike" amid developments in oil prices. Meanwhile, "the resurgence of AI concerns coupled with the upcoming US midterm elections pose risks to the Dollar," despite the central bank's still-hawkish stance. Technically, XAU/USD has been trending lower since hitting the $4,700 high in late August, forming a series of lower lows and lower highs. The pair is currently trading below its 50-day, 100-day, and 200-day Simple Moving Averages (SMAs), suggesting sellers remain dominant. Meanwhile, the RSI at 34 suggests low buying momentum, while MACD remains negative, indicating sustained downside pressure. Resistance levels include $4,000, followed by $4,100, the 100-day SMA at $4,218, and the 50-day SMA around $4,257. For any substantial bounce higher, the $4,400 horizontal level could become significant before reaching the 200-day SMA at $4,491. Gold is currently trading under $4,000; the first structural support comes at $3,950, followed by the July low at $3,941. If price falls below this level, there will be more room for downside continuation.
