Gold H4 Daily Outlook Update Gold (XAU/USD) fell below the $3,900 threshold at the start of the European trading session on Tuesday, nearing its lowest since October 2025, when it was last recorded amid prospects of further monetary policy normalization by the US Federal Reserve (Fed). Monday's reports indicated that US manufacturing business activity has increased for the tenth straight month in October. The ISM Manufacturing PMI came in higher than expected, rising to 55.5 in October from 54.5 the prior month. This confirmed the market's hawkish Fed bets, which, along with the rebound in US bond yields, put heavy pressure on the non-yielding precious metal. The US Dollar (USD), meanwhile, is struggling to attract buyers as traders remain cautious ahead of the upcoming US midterm elections, which will determine who controls Congress. Prediction markets clearly favor Democrats to win control of both houses, the House of Representatives and the Senate. A Republican sweep, however, would be a bigger surprise for the market and might raise US Treasury yields and the US Dollar (USD). Additionally, hopes for a possible diplomatic solution to end the US-Iran war could further discourage the USD bulls from making bold moves. This is because the President of the US, Donald Trump, stated on Monday that Iran wishes to strike a deal to end the war and that such a deal was possible. Furthermore, Iranian Foreign Minister Abbas Araqchi said consultations through mediators had been very intensive. However, several days of negotiations between Iranian officials and Qatari mediators failed to produce a breakthrough, despite Tehran's revised proposals to reopen the strategic Strait of Hormuz for two days, provided the US fulfills a set of conditions. Moreover, a fresh escalation of tensions between Russia and Ukraine keeps the geopolitical risk premium firmly in play. This should act as a tailwind for the USD, suggesting that the path of least resistance for gold remains to the downside. On the economic data front, traders will look to the release of US JOLTS Job Openings data for impetus later in the North American session. The focus, however, will remain on the key US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report, due on Friday. The XAU/USD pair continues to show a short-term bearish bias below the 100-period Exponential Moving Average (EMA) on the 4-hour chart. This follows the overnight rejection around the recent swing low in late October and the subsequent pullback. In addition, the bullish MACD fails to support the negative price-action bias. The Relative Strength Index (RSI) around 40.0 points toward a weak rally from the recent oversold territory. Bears, meanwhile, would focus on Friday's swing low in the $3,870 region as a key level where demand might form. A break below this level would set the stage for further extension of the established bearish path. To the upside, the first resistance could come around the 100-period EMA at $4,053. A move above this level would relieve some bearish pressure and would allow for a constructive rebound phase.
