Gold Price Stable Above Near-Term Range Support, Bullish Potential Seems Intact

  • The price of Gold is struggling to gain significant momentum and remains confined to a familiar range.
  • Reducing bets on a 50 basis point Fed rate cut in November acts as a headwind for the precious metal.
  • Geopolitical risks and a modest decline in the USD should limit further losses for XAU/USD.

The price of Gold (XAU/USD) remains depressed during the Asian session on Tuesday and is currently sitting just above the lower limit of a short-term range. Investors have been reducing their expectations of another large interest rate cut by the Federal Reserve (Fed) in November, amid signs that the US labor market remains resilient. This, in turn, is considered a key factor acting as a headwind for the non-yielding yellow metal.

Meanwhile, the US dollar (USD) retreated from a seven-week high hit on Friday, as traders opt to stay on the sidelines ahead of the release of FOMC meeting minutes on Wednesday. In addition to this, the US Consumer Price Index (CPI) and Producer Price Index (PPI) on Thursday and Friday, respectively, will influence expectations about the Fed’s rate cut path. This will provide a new boost to the USD and the price of Gold.

Meanwhile, geopolitical risks arising from the ongoing conflicts in the Middle East should act as a tailwind for the safe-haven Gold price and help limit any significant decline. This, in turn, makes it prudent to wait for a sustained break below the one-week trading range support before positioning for an extension of XAU/USD’s recent pullback from the all-time peak reached on September 26.

Daily Market Summary: Gold Price Widens Play Range Amid Mixed Fundamental Signals

  • The upbeat US jobs report for September released on Friday leads traders to reduce bets on more aggressive Federal Reserve policy easing and undermines the price of Gold.
  • According to CME’s FedWatch tool, market participants are currently pricing in an 85% probability of a 25 basis point rate cut at the next FOMC policy meeting in November.
  • The 10-year US Treasury yield surpassed the 4% threshold for the first time in two months, while the US dollar retreated from a seven-week high.
  • Minneapolis Fed President Neel Kashkari noted Monday that the overall balance of risks has now shifted from higher inflation toward a possible rise in unemployment.
  • Separately, St. Louis Fed President Alberto Musalem said he supports additional interest rate cuts and that economic performance will determine the path of monetary policy.
  • Hezbollah fired rockets at Israel’s port city of Haifa and a military base near the central city of Tel Aviv, while Israel bombed a pair of buildings in Beirut’s southern suburbs.
  • Investors remain concerned that tensions in the Middle East could escalate into a broader conflict, which could act as a tailwind for the safe-haven XAU/USD and help limit deeper losses.
  • China’s state planner, the National Development and Reform Commission (NDRC), said on Tuesday that downward pressure on China’s economy is increasing.
  • Traders now await the release of the FOMC meeting minutes on Wednesday, which will be followed by the latest US inflation figures on Thursday and Friday, respectively.

Technical Outlook: Gold price bulls have the upper hand as long as they hold above the pivotal support of 2,632-2,630

From a technical perspective, the 2,632-2,630 area, or the lower boundary of a short-term trading range, could continue to protect immediate downside. A convincing break below could trigger some technical selling and drag XAU/USD below the $2,600 level, towards the next relevant support near the $2,560 area. The corrective decline could further extend towards the next relevant support near the 2,535-2,530 region en route towards the psychological level of $2,500.

Meanwhile, the oscillators on the daily chart remain in positive territory and favor bullish traders. That said, the 2,670-2,672 area could continue to act as an immediate barrier. This is followed by the 2,685-2,686 zone or the all-time high reached in September, and the $2,700 level, which if broken, will be seen as a new trigger for the bulls and will set the stage for an extension of an uptrend. well established for several months.

Gold FAQs


Gold has played a fundamental role in human history, as it has been widely used as a store of value and medium of exchange. Today, apart from its brilliance and use for jewelry, the precious metal is considered a safe-haven asset, meaning it is considered a good investment in turbulent times. Gold is also considered a hedge against inflation and currency depreciation, since it does not depend on any specific issuer or government.


Central banks are the largest holders of Gold. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and purchase Gold to improve the perception of strength of the economy and currency. High Gold reserves can be a source of confidence for the solvency of a country. Central banks added 1,136 tons of gold worth about $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the largest annual purchase since records exist. Central banks in emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.


Gold has an inverse correlation with the US Dollar and US Treasuries, which are the main reserve and safe haven assets. When the Dollar depreciates, the price of Gold tends to rise, allowing investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken the price of Gold, while sell-offs in riskier markets tend to favor the precious metal.


The price of Gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of Gold to rise rapidly due to its status as a safe haven asset. As a non-yielding asset, the price of Gold tends to rise when interest rates fall, while rising money prices tend to weigh down the yellow metal. Still, most of the moves depend on how the US Dollar (USD) performs, as the asset is traded in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold in check, while a weaker Dollar is likely to push up Gold prices.

Source: Fx Street

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