FX.co ★ XAU/USD, GOLD

Gold (XAU/USD) faced selling pressure on Tuesday, retreating from some of the strong gains recorded the previous day—after prices touched the $4,150 resistance level. Nevertheless, the spot price of gold remained stable above $4,100 as the European session began. Growing expectations of an interest rate hike by the U.S. Federal Reserve served as a key factor driving capital outflows from gold, a non-interest-bearing asset. Meanwhile, the U.S. Dollar (USD) struggled to attract sustained buying interest, weighed down by conflicting signals regarding progress in diplomatic negotiations between the United States and Iran. This situation provided some support for gold prices, as market participants awaited critical U.S. consumer inflation data. Regarding the latest geopolitical developments in the Middle East crisis, U.S. President Donald Trump stated that positive momentum was building toward ending the conflict with Iran; he added that the likelihood of renewed military strikes was extremely low, effectively declaring the conflict over. However, Mohsen Rezaei, Secretary of Iran’s Expediency Discernment Council, denied reports of ongoing negotiations—labeling them "fake news"—and reiterated that Washington must accept the seven clear conditions set forth by Tehran to bring the conflict to an end. This persistent diplomatic tension has created an enduring geopolitical risk premium in global asset markets, hindering any large-scale liquidation of gold—a traditional safe-haven asset—and sustaining broad demand for the US dollar. Furthermore, the robust US non-farm payrolls report released last Friday showed an increase of 165,000 jobs in October, surpassing even the most optimistic market forecasts. Additionally, job growth figures for August and September were revised upward, adding a combined 84,000 jobs. Coupled with a decline in the national unemployment rate to 4.1%, these strong labor market data underscore the resilience of the US economy and provide a solid fundamental basis for further monetary policy tightening by the Federal Reserve. According to the CME Group’s FedWatch tool, the futures market currently assigns an over 80% probability to a 25-basis-point interest rate hike at the Federal Reserve’s December policy meeting. This hawkish market expectation continues to suppress any attempts at a recovery in gold prices. Nevertheless, traders are adopting a cautious stance, awaiting clearer signals from central banks regarding long-term interest rate trends. Consequently, financial markets remain focused on the upcoming US Consumer Price Index (CPI) report, which serves as a key catalyst influencing the trajectory of the US dollar and determining the short-term momentum of gold prices. Accordingly, it is advisable to wait for confirmation that selling pressure persists before concluding that the recent recovery in gold prices—from the $3,870 level (the lowest point since September 2025)—has ended, or before taking positions betting on a resumption of the long-term, multi-month downtrend.

From a technical perspective, on the four-hour chart, the spot gold price (XAU/USD) has recently moved above both the 100-period and 200-period simple moving averages (SMA), signaling a continued short-term positive trend. Technical momentum indicators generally point to a mild bullish bias: the 14-period Relative Strength Index (RSI) is hovering around 57, while the Moving Average Convergence Divergence (MACD) remains above the zero line—suggesting that buying strength persists and the market has not yet entered overbought territory. Should gold prices decline, immediate support is expected at the 200-period SMA (approximately $4,103), followed by the 23.6% Fibonacci retracement level ($4,059). Further support lies near the 100-period SMA ($4,042)—a key level that buyers must defend to sustain the current nascent recovery. On the upside, immediate technical resistance is located near the 38.2% Fibonacci retracement level ($4,180). A successful break above this initial level could lead to a further rise in gold prices toward the 50.0% Fibonacci retracement level ($4,279). If the upward momentum continues, the next target would be near the 61.8% Fibonacci retracement level ($4,377).