Gold (XAU/USD) Daily Outlook Update Gold (XAU/USD) struggles to follow the previous session's relatively solid bounce above the $4,300 mark as it runs into fresh sellers in the Asian session on Wednesday. The US Dollar (USD) is holding up its recent gains to the highest level since July 30 amid a hawkish Fed stance, which is expected to weigh on the precious metal. The US central bank raised rates for the first time in over three years after its September monetary policy decision, while hinting at another increase this year. Furthermore, St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee have openly endorsed tighter monetary policy due to continued inflation risk. In addition, the Boston Fed President Susan Collins and the Richmond Fed President Tom Barkin have not ruled out future rate hikes to fight inflation. Traders see the probability of an increase in December at 90%, based on the CME Group's FedWatch Tool. Regarding the recent updates in relation to the Middle East crisis, the US President Donald Trump said before the United Nations General Assembly (UNGA) that he is faced with an important decision to choose between agreeing with Iran or "annihilating" the Islamic Republic if the issue remains unresolved. New US sanctions meant to turn off Iranian aviation take effect on Wednesday. Iranian foreign minister Abbas Araghchi also met with US special envoy Steve Witkoff to present Tehran's demands to reopen the Strait of Hormuz. Mr. Trump said that negotiations were successful without elaboration. This supports the geopolitical risk premium and the USD bulls, and hence the Gold price. That said, US bond yields are below multi-year levels, due to the latest drop in crude oil prices, which is calming inflation concerns. This could keep pressure off the USD and limit gold losses. For traders, the release of flash global PMIs is expected to signal economic conditions in major developed nations. In addition, speeches by prominent FOMC members and developments in geopolitics are likely to drive USD buying and create short-term trading opportunities in gold. Nevertheless, all eyes will be on a crucial meeting scheduled between US President Donald Trump and his Chinese counterpart, Xi Jinping, on Thursday. The XAU/USD pair trades in a restricted range below the 100-period100-period Exponential Moving Average at $4,369. The commodity, nevertheless, remains just above the 50.0% retracement level from $3,934.91 and $4,694.41. Furthermore, momentum oscillators are mixed: the Relative Strength Index at 47.86 is moving closer to neutral, while the Moving Average Convergence Divergence oscillator is showing a negative reading of -9.80, reflecting a drop in bullish momentum. Conversely, near-term support comes in at the 50.0% retracement at $4,314, while key Fibonacci zones come in at $4,225 (61.8%) and $4,097 (78.6%), with a structural bottom at the previous swing low at $3,934. The upside resistance level starts from the 100-period EMA at $4,369 and continues to the 38.2% retracement level at $4,404. For downside pressure to ease and pave the way for price to move to the upper resistance zone at $4,515, the cycle high at $4,694 needs to break.
