Gold Awaits Fed Clues

 

Gold prices recovered after the Federal Reserve (Fed) kept interest rates unchanged, while comments from Fed Chair Kevin Warsh proved less hawkish than some market participants had anticipated. US 10-year Treasury yields stalled and closed lower, prompting the US Dollar to retreat after three consecutive days of gains.

The combination of softer Treasury yields and a weaker dollar supported gold, allowing XAU/USD to climb to $4,082 during Warsh's remarks before closing at $4,067.

The Fed maintained its benchmark interest rate at 3.75%–4.00%, in line with market expectations. Although Warsh emphasized that inflation remained too high, he provided limited forward guidance compared with previous meetings. For now, markets found no immediate warning that monetary policy would become significantly more restrictive.

However, gold's next move may depend on a fresh set of economic data, including the US Personal Consumption Expenditures (PCE) Price Index and Gross Domestic Product (GDP) report, alongside developments in the Middle East.

Fed Rate Hike Risks Remain

The Fed's decision to keep interest rates unchanged had largely been priced into markets over the preceding five days. Gold initially advanced following the announcement but briefly weakened as traders turned their attention to Warsh's press conference, which began approximately 30 minutes later.

Buying interest subsequently returned as the Fed chair's comments appeared less hawkish than expected.

Warsh delivered a clear message that inflation remained elevated, with recent energy price increases reinforcing the need for continued vigilance over monetary policy. Nevertheless, policymakers believe their existing measures are beginning to produce results and want more economic evidence before deciding on their next move.

Markets interpreted the remarks as broadly consistent with expectations, reducing the immediate risk of a more aggressive policy stance.

This gave investors room to scale back expectations for a near-term rate hike without necessarily anticipating an imminent rate cut. Warsh's emphasis on energy price pressures linked to the Iran conflict also encouraged speculation that the Fed might not need to raise rates further if hostilities ended and inflationary pressures eased more quickly than expected.

The US Dollar weakened during the policy announcement and press conference, although its overall performance throughout the day remained mixed.

Meanwhile, two-year Treasury yields declined while longer-term yields moved higher, producing a sharper divergence across the US Treasury yield curve. The movement in yields helped support gold by easing pressure from short-term interest rate expectations.

Geopolitical Tensions Remain Uncertain

Developments in the Middle East also influenced market sentiment. The recent surge in oil prices eased somewhat as investors maintained hopes for diplomatic mediation, although concerns about a potential US military strike against Iran following the November 3 midterm elections continued to weigh on sentiment.

US Vice President JD Vance reportedly attempted to contact Iranian officials known for their hardline positions to encourage peace negotiations and help prevent an intensive military campaign that President Donald Trump was expected to consider after the election.

Additional reports offered some grounds for cautious optimism. Mediators were reportedly seeking to persuade Iran to accept a United Nations delegation to investigate its nuclear program in exchange for potential US sanctions relief. Other reports pointed to possible easing of the US blockade and the release of frozen Iranian funds.

Although these proposals have not been finalized, markets viewed the diplomatic efforts as a possible pathway to avoiding an imminent military escalation.

Mediators were reportedly hoping for an Iranian response to the proposals by the end of the week. Any meaningful progress toward de-escalation could help stabilize oil prices and reduce inflation concerns, potentially supporting gold through a softer US Dollar and lower expectations for further monetary tightening.

However, a breakdown in negotiations or signs of an imminent military strike could quickly reverse that outlook.

Next Catalysts: PCE, GDP, and Geopolitics

The next major catalysts for gold are the US PCE inflation report and GDP figures, scheduled for release at 19:30 WIB.

Stronger-than-expected economic data could revive pressure on gold, particularly if both reports point to resilient economic activity and persistent inflation. In a more extreme scenario, substantially stronger-than-expected figures could push XAU/USD back below the psychological $4,000 level.

Conversely, softer economic data could weaken the US Dollar and reduce expectations for additional Fed tightening, creating room for gold to recover toward the $4,100 resistance zone.

At this stage, the risk of a decline below $3,886 does not appear to be justified by strong economic data alone. A sharper sell-off would become more plausible if robust US data coincided with a renewed escalation in geopolitical tensions.

As long as there are no clear signs of an imminent military strike, the baseline outlook favors a relatively limited downside rather than an immediate collapse. However, gold would likely need meaningful geopolitical de-escalation to sustain a rally above the $4,127 level.

Gold Technical Analysis: Resistance at $4,104–$4,142

Gold's daily candlestick closed in a doji-like pattern resembling a hanging man, reflecting uncertainty between buyers and sellers.

Prices initially dropped sharply to $4,025 following the Fed's interest rate announcement before rebounding to $4,082 during Warsh's remarks. XAU/USD subsequently retreated slightly to close at $4,067.

From a technical perspective, bullish momentum remains relatively weak. Gold has struggled to break above $4,082, which remains below the daily resistance zone at $4,104–$4,142 identified in the previous analysis.

Nevertheless, the downside also appears limited for now, as buyers emerged following the rejection near $4,025.

Gold's next direction will depend heavily on the upcoming PCE inflation and GDP releases.

Bullish scenario: If US economic data comes in weaker than expected, gold could extend its recovery and retest the $4,104–$4,142 resistance zone. A sustained break above this area could improve the short-term technical outlook, although further gains would still depend on the US Dollar, Treasury yields, and geopolitical developments.

Bearish scenario: Stronger-than-expected data could trigger another correction, bringing the $4,000 and $3,975 support levels into focus. If PCE inflation significantly exceeds expectations, selling pressure could push gold below $3,975.

The next major daily support levels are located at $3,959 and $3,886, with the latter becoming relevant in a more extreme bearish scenario.

Key Gold Price Levels

• Resistance 1: $4,104

• Resistance 2: $4,142

• Bullish breakout reference: $4,127

• Support 1: $4,000

• Support 2: $3,975

• Support 3: $3,959

• Major downside support: $3,886

Gold Outlook: Data Determines Direction

Gold has found temporary support from a weaker US Dollar and a less hawkish-than-expected interpretation of the Fed's latest policy communication. However, the recovery remains technically fragile, with prices still facing resistance below $4,104–$4,142.

The upcoming US PCE and GDP releases could determine whether gold extends its rebound toward $4,100 or returns to test support at $4,000 and $3,975.

Beyond economic data, geopolitical developments remain equally important. Progress in US-Iran negotiations could reduce inflationary pressures and support a sustained recovery, while renewed military escalation could increase market volatility and trigger fresh selling pressure.

For now, traders are waiting for the next pieces of the puzzle before committing to a clearer directional outlook for XAU/USD.

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Antam Gold Rises

Antam gold prices rose by IDR 20,000 to IDR 2,570,000 per gram on Wednesday, October 28, 2026, according to data published on the official Logam Mulia website. The increase came as global gold prices traded around $4,000 per troy ounce ahead of the US Federal Reserve’s (Fed) interest rate decision scheduled for early Thursday, October 29, Jakarta time.

## Antam Gold vs. Global Gold Prices

Domestic gold prices have shown relatively limited movement compared with global gold futures over the past week.

The contrasting movements in domestic and international gold prices coincided with the rupiah’s depreciation. Exchange rate fluctuations are one of the factors influencing gold prices in rupiah, alongside international bullion prices and domestic pricing components.

For other product sizes, Antam gold bars weighing 5 grams were priced at IDR 12,665,000, according to Logam Mulia data cited by local media.

## Gold Prices Ahead of Fed Decision

Market participants are closely monitoring the Federal Reserve’s monetary policy meeting on October 27–28, 2026. 

The expected decision is important for gold markets because interest rate expectations and the Fed’s policy guidance can influence the US Dollar and the appeal of precious metals.

Investors will examine the Fed’s policy statement for indications of whether persistent inflation could keep interest rates elevated for longer or whether the central bank may have room to adjust its policy in future meetings.

## Indonesian Gold Stocks Mixed

Shares of Aneka Tambang (Antam) rose 0.36% to IDR 2,770 per share. Despite the daily gain, the stock remained down 12.06% year to date.

In contrast, Merdeka Copper Gold shares fell 2.91%, while Hartadinata Abadi declined 3.31% during the same session.

The Jakarta Composite Index (JCI) closed at 5,266.13 on Tuesday, down 1.99%, according to Indonesia Stock Exchange data. Ten of the 11 sectoral indices ended in negative territory, including the basic materials sector, which dropped 3.32%.

## Antam Gold Price Outlook

Over the past week, Antam gold prices remained within a relatively narrow range of IDR 2.55 million to IDR 2.57 million per gram. By comparison, gold futures denominated in US dollars fell by more than 3% over the same period.

The rupiah’s depreciation against the US Dollar is one factor that may help explain the divergence between domestic and international gold prices. Other factors include domestic pricing policies and applicable costs.

Going forward, the Federal Reserve’s interest rate decision, movements in the US Dollar, oil prices, and the rupiah exchange rate will remain important factors for gold market participants to monitor.

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Gold Moves Sideways

 

Gold prices traded relatively steadily above the psychological $4,000 level as US Treasury yields showed little movement and investors adopted a cautious stance ahead of the Federal Reserve's October 27–28, 2026, policy meeting. Although stable bond yields helped limit selling pressure, downside risks remained as the US Dollar strengthened for a second consecutive session.

The 10-year US Treasury yield was broadly flat overnight, offering little indication that the sharp rise seen last Friday would continue. This helped gold maintain its position above $4,000, although the possibility of further declines remained. Meanwhile, the US Dollar closed higher for a second straight day, though the strength could prove temporary.

Limited US economic data overnight also eased immediate pressure on gold. US equities recovered following Friday's decline, while calmer market sentiment and a modest pullback in oil prices helped stabilize the precious metal during the opening sessions of the week.

Geopolitical Risks Still Threaten Gold

Gold prices remained relatively stable during the Asian session, while oil prices edged lower. Nevertheless, energy markets remain a major source of inflation risk for central banks as uncertainty surrounding Iran and the broader Middle East situation persists.

The Federal Reserve began its two-day policy meeting on Tuesday and is scheduled to announce its decision on Wednesday in the United States, or early Thursday morning in Indonesia.

According to CME FedWatch data cited in the market outlook, traders priced in an 89.5% probability that the Fed would leave interest rates unchanged, compared with 90% previously. The probability of an October rate increase stood at 10.5%, up from 10% in the previous assessment.

Some analysts expected the Fed to postpone an October rate increase, potentially leaving the door open for another hike at the December 8–9 meeting.

Despite expectations for rates to remain unchanged, markets were cautious because elevated energy prices could reignite inflationary pressure. Investors were therefore watching for any unexpected rate increase and, if the Fed held rates steady, for clues in Chair Kevin Warsh's policy comments about the possibility of further tightening.

Higher interest rates and rising Treasury yields could weigh on gold because the precious metal does not generate interest income. Conversely, falling yields and a less hawkish Fed stance could help support gold prices.

US Economic Data Could Influence Fed Expectations

Several US economic releases were scheduled for Tuesday, including durable goods orders, the Conference Board's Consumer Confidence Index, and new home sales. The figures were expected at 19:30 WIB and 21:00 WIB, respectively.

Weaker-than-expected data could strengthen the argument for delaying further rate increases, particularly if the figures point to a slowdown in economic activity. Such an outcome could support gold by reducing expectations for tighter monetary policy.

Stronger data, on the other hand, could reinforce the case for another rate increase at a subsequent meeting if the Fed decided to hold rates in October. This scenario could strengthen the US Dollar and put renewed pressure on gold during the US trading session.

Investors were also monitoring Treasury yields closely. A continued decline in yields could help gold avoid a sharp sell-off and potentially support a recovery. However, a renewed rise in yields could reverse the latest stabilization and increase the risk of further losses.

Israeli Election Adds Geopolitical Uncertainty

Developments surrounding Israeli politics were another factor shaping market sentiment. The source market commentary suggested that Prime Minister Benjamin Netanyahu faced a potential electoral challenge from former military chief Gadi Eisenkot, although the political outlook and the reported election timeline require independent verification.

The commentary linked the political uncertainty to the timing of potential US action against Iran, particularly in the context of the US midterm elections scheduled for November 3 and the anticipated Israeli political developments in early November.

A change in Israeli leadership could potentially produce a more cautious approach to renewed military operations, depending on the priorities of a new government. If tensions eased and diplomatic efforts continued, safe-haven demand for gold could increase or decrease depending on how investors interpreted the broader economic consequences.

However, a potential Netanyahu defeat would not automatically eliminate the risk of a US-Iran confrontation. Washington could still pursue military action independently, while regional tensions could intensify regardless of the outcome of Israeli political developments.

For gold traders, the key issue is whether geopolitical developments increase safe-haven demand or push energy prices higher, creating additional inflation risks and strengthening expectations for tighter monetary policy.

Gold Price Scenarios Ahead of FOMC

Gold's next significant move could depend on the combination of Federal Reserve policy, Treasury yields, and developments in the Middle East. The following scenarios outline potential market reactions rather than guaranteed price outcomes.

1. Netanyahu Remains in Power

A Netanyahu victory could increase concerns about renewed US-Israeli military action against Iran if markets interpret the result as supportive of a more aggressive regional policy.

• Oil prices: Further gains could renew inflation concerns, with WTI potentially testing $110 per barrel under the scenario described in the source commentary.

• Federal Reserve: Higher energy-driven inflation could reinforce expectations for tighter monetary policy and raise the risk of more hawkish Fed communication.

• Gold outlook: Gold could face renewed selling pressure, with $3,886 identified in the source analysis as a potential downside threshold, followed by possible support near $3,719 and $3,550.

These levels are scenario-based technical estimates, not confirmed support levels or guaranteed price targets.

2. Netanyahu Loses the Election

A Netanyahu defeat could change the political dynamics surrounding Israel's approach to Iran, although it would not necessarily prevent further military escalation.

Two possible outcomes could affect gold differently:

• The US proceeds with military action later: Gold could initially rebound on safe-haven demand, but its subsequent direction would depend on the impact on oil prices, inflation expectations, Treasury yields, and the US Dollar.

• The US postpones or cancels an attack, or diplomacy continues: Reduced geopolitical uncertainty could ease some safe-haven demand. Gold's direction would then depend on whether lower energy prices and Treasury yields provide stronger support than the decline in geopolitical risk.

The relationship is not automatic: easing geopolitical tensions can reduce demand for gold, while lower oil prices and softer inflation expectations can also support the metal by reducing pressure for higher interest rates.

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Gold Awaits Crucial Catalysts

Gold prices may find temporary relief as the US Dollar and Treasury yields retreat, but the next three trading days could prove decisive for the precious metal. Investors are weighing shifting US-Iran tensions, Israel's political outlook, and the Federal Reserve's upcoming policy decision, all of which could determine the next major move in XAU/USD.

The US 10-year Treasury yield rebounded on Friday, as expected, helping the US Dollar strengthen into the close. However, both opened lower on Monday after President Donald Trump said there would be no attack on Iran that day, offering some relief to markets at the start of the week.

Meanwhile, October US economic activity data presented a mixed picture. The S&P Global Services PMI came in at 57.9, slightly below expectations of 58.0 and down from the previous reading of 59.8. The Manufacturing PMI stood at 56.0, exceeding expectations of 55.5 but falling from 57.0 in the previous month.

New orders reached their highest level in more than four and a half years, while business output expectations for the next 12 months slowed from September but remained the second-highest reading of the year. Resilient manufacturing activity and persistent inflation concerns helped limit gold's gains on Friday.

## Small-Scale “Epic Fury” Operation Under Consideration

During his midterm election campaign, Trump suggested that the US could launch another operation against Iran, describing a potential action as a smaller-scale version of “Epic Fury.” He also indicated that Cuba could become a subsequent focus after Iran.

Markets interpreted these remarks as a warning that military action could take place in the near future, triggering a sharp rally in oil prices over the final two trading days of last week. Brent crude briefly climbed above $116 per barrel, while West Texas Intermediate (WTI) reached $103 per barrel.

However, Trump's latest remarks that no attack would take place before the US midterm elections offered temporary relief to markets that had been gripped by uncertainty over the weekend.

Nevertheless, geopolitical risks remain elevated. The New York Times previously reported that the US and Israel had developed specific plans for another potential attack on Iran following the US midterm elections. Potential targets could include Iranian nuclear facilities, missile and drone storage sites, and energy infrastructure.

This uncertainty means markets may remain on edge until the midterm elections scheduled for November 3.

There are also concerns that Trump could delay military action until the outcome of Israel's political developments becomes clearer. With Israel's election scheduled for October 27, investors are watching whether Benjamin Netanyahu remains in power and whether Washington and Jerusalem continue coordinating their approach toward Iran.

If Netanyahu retains his position, markets may become increasingly concerned about renewed joint military action against Iran. One risk scenario is that an attack could occur as early as the coming weekend, after the FOMC meeting but before the US midterm elections. However, a post-election escalation remains a major geopolitical risk for the following week.

At the same time, rising oil prices are reinforcing inflation concerns and increasing the likelihood that the Federal Reserve will maintain restrictive monetary policy for longer. Higher interest rates increase the opportunity cost of holding non-yielding gold, potentially limiting its upside.

## US Economic Data and the FOMC Meeting Take Center Stage

The economic calendar is expected to play a crucial role in determining gold's short-term direction.

Tuesday's releases include US durable goods orders, the Conference Board Consumer Confidence Index, and new home sales. Durable goods orders and consumer confidence will be particularly important in assessing the strength of economic activity and household sentiment.

Attention will then turn to the Federal Reserve's two-day FOMC meeting on October 27–28. Markets broadly expect the Fed to keep its benchmark interest rate unchanged at 4.00%, making the accompanying policy statement and comments from Fed Chair Kevin Warsh particularly important.

Later in the week, the US Personal Consumption Expenditures (PCE) Price Index and third-quarter Gross Domestic Product (GDP) figures, scheduled for Thursday, will provide further insight into inflation and economic growth. Friday's focus will shift to the Bank of Japan's policy announcement and the Chicago PMI.

The Fed faces a difficult balancing act. Policymakers need to assess whether persistent inflation is becoming embedded in the economy while also considering the risk that prolonged monetary tightening could slow economic activity.

If inflation remains elevated but economic growth begins to weaken, the probability of additional rate hikes could decline. Conversely, if economic indicators remain strong and price pressures persist, the Fed may maintain a more hawkish stance.

For gold, the combination of inflation data, economic growth, and the Fed's policy guidance could determine whether the recent decline extends or gives way to a stronger recovery.

## Treasury Yields Remain a Key Driver for Gold

Despite the dominant geopolitical headlines, US Treasury yields remain one of the most important indicators for the direction of gold prices, particularly as markets approach the Federal Reserve's policy announcement.

If Treasury yields continue moving lower, gold could avoid a deeper decline and potentially regain upward momentum. Lower yields generally reduce the opportunity cost of holding non-interest-bearing assets and can weaken support for the US Dollar.

Conversely, a renewed rise in Treasury yields could place additional pressure on gold and force traders to reconsider bullish positions in favor of selling strategies.

The next one to three trading days are therefore particularly important as investors assess the interaction between geopolitical developments, inflation expectations, and the Fed's policy outlook.

## Three Key Scenarios for Gold in the Coming Days

### 1. Netanyahu Remains Prime Minister of Israel

If Netanyahu retains power, concerns could intensify that the US and Israel will resume coordinated military action against Iran in the near future. Such a development could trigger another escalation in gepolitical tensions.

Potential market implications include:

- **Oil prices:** Crude oil could extend its rally, with WTI potentially testing $110 per barrel or higher, intensifying inflation concerns.

- **Federal Reserve policy:** Persistent energy-driven inflation could strengthen expectations of tighter monetary policy. Traders should watch for potentially more hawkish comments from Kevin Warsh following the FOMC meeting on Wednesday, October 28, US time.

- **Gold price:** Gold could face renewed selling pressure, with a potential break below $3,886 opening the way toward support near $3,719 and, in a deeper decline, $3,550.

These levels represent potential downside scenarios rather than confirmed price targets. Actual market reactions will depend on the scale of any escalation and the accompanying movement in Treasury yields and the US Dollar.

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Gold Faces Weekly Losses

 

Gold prices are heading for their steepest weekly decline in more than four months on Friday, pressured in part by rising oil prices and growing inflation concerns.

At 5:00 PM WIB, spot gold (XAU/USD) fell 0.1% to $4,022.53 per troy ounce, putting the precious metal on track for a 3.4% weekly loss. Meanwhile, gold futures declined 0.6% to $4,037.15 per troy ounce, heading toward a 3.5% weekly drop.

Rising Oil Prices Fuel Inflation Concerns

Brent crude futures, the global oil benchmark, climbed again and touched $114 per barrel for the first time since May. Growing speculation over escalating Middle East tensions has raised concerns about further disruptions to supply flows from the major oil-producing region.

Media reports this week indicated that the United States and Israel were considering plans for new strikes against Iran following the US midterm elections in November. Iran has warned that it would retaliate against any attacks, potentially targeting economic and civilian infrastructure around the Persian Gulf.

Meanwhile, Iran-backed Houthi militants in Yemen have continued targeting locations in neighboring Saudi Arabia. On Thursday, state-owned oil giant Saudi Aramco reportedly ordered the evacuation of its headquarters in Dhahran, near Bahrain.

Brent crude has gained more than 3% over the week, adding to inflationary pressures ahead of next week's closely watched Federal Reserve policy meeting.

Federal Reserve Policy Weighs on Gold

Although the Federal Reserve is widely expected to hold interest rates steady at its October 27–28 meeting, a rate hike in December is already being anticipated by markets.

Several Fed officials have downplayed the urgency of an immediate rate increase. However, policymakers have emphasized the need to bring inflation back toward the central bank's 2% target.

Higher interest rates can weigh on gold by increasing the opportunity cost of holding a non-yielding asset. If rising oil prices keep inflation elevated and reinforce expectations of tighter monetary policy, gold could face further downward pressure.

Gold Fails to Benefit From Safe-Haven Demand

Gold has also failed to benefit from the recent sell-off in technology stocks and the shift toward the relative safety of US Treasury bonds, according to analysts at ING.

In a research note, the analysts observed that investors appeared more concerned about rising oil prices and their implications for inflation and, ultimately, central bank policy.

“The gold market appears to be focusing more on higher oil prices and what they mean for inflation — and ultimately central bank policy,” the analysts added.

For gold traders, the combination of rising energy prices, inflation risks, and expectations surrounding the Federal Reserve's next policy decisions remains a key factor to watch. Unless inflation concerns ease or interest rate expectations become more supportive, gold may continue to face pressure as it heads toward the end of the week.

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Geopolitics Pressure Gold

 

Gold Market Drivers

US 10-year Treasury yields initially moved lower before reversing higher in the afternoon. However, the rebound was limited, and yields closed lower again, although the decline was not as steep as the previous day. Meanwhile, the US Dollar (USD) remained broadly weak throughout Wednesday’s trading session. Despite the softer dollar, gold failed to hold its ground or extend its recovery.

Geopolitical developments remained the main obstacle to further gains, with gold’s rebound capped at $4,142 before prices fell back below $4,100 during Thursday’s Asian session.

US and Israel Prepare New Iran Strike Plans

Geopolitical concerns intensified following reports that the US and Israeli militaries had developed specific plans for potential new strikes against Iran after the upcoming US midterm elections on November 3. The New York Times cited US officials and other individuals familiar with the discussions.

The reported targets could include Iranian nuclear facilities, missile and drone storage sites, and energy infrastructure. However, some officials indicated that oil refineries and other oil infrastructure might be avoided to prevent a potential surge in gasoline prices.

Meanwhile, the US military buildup, including the deployment of three aircraft carriers, was reportedly expected to be fully in place by early November.

Nevertheless, it is important to note that plans for potential strikes against Iran have been discussed repeatedly. The Pentagon has presented President Donald Trump with several possible scenarios, while Trump has previously vetoed a return to large-scale hostilities, including earlier this month when both militaries were reportedly preparing for attacks.

Therefore, any proposed US-Israeli military operation would ultimately depend on Trump's decision.

Separately, NBC News reported that US troops and diplomats were being withdrawn or reduced across parts of the Middle East. Citing two US officials, the report described a reduction in the American military presence at US bases throughout the region. The US State Department was also reportedly beginning to order further staff reductions at diplomatic posts.

These measures come amid heightened regional threats and the possibility of US military action against Iran.

The withdrawal of military personnel and diplomats is often interpreted as a sign of rising security risks. Such developments can increase the geopolitical risk premium in crude oil prices, given the Gulf region's critical role in global energy supplies.

Economic Data and Treasury Yields in Focus

On the economic calendar, US Initial Jobless Claims at 19:30 WIB and the Leading Economic Index at 21:00 WIB are the main releases. Initial Jobless Claims are expected to carry greater weight in influencing market movements.

However, neither report is expected to significantly change market expectations for the Federal Reserve's interest rate decision next week. As a result, attention remains focused on US Treasury yields and geopolitical developments.

Treasury yields remain a key indicator for gold's direction throughout this week. If yields resume their decline, gold could regain its upward momentum. Conversely, a renewed rise in yields could push gold lower and prompt traders to shift their strategies toward selling.

Traders should also closely monitor developments across the Middle East, particularly Saudi Arabia, the Houthis, and US-Iran relations, as well as the ongoing Russia-Ukraine conflict.

Any threats to shipping through the Strait of Hormuz or to Saudi energy infrastructure could directly affect physical oil supplies. Confirmation from the Pentagon or the US State Department regarding the scale of troop withdrawals would also help markets determine whether these moves signal an impending escalation or are merely precautionary measures.

Two Key Geopolitical Scenarios for Gold

Traders should pay attention to two potential scenarios that could shape gold's next move.

1. Further Escalation Could Weigh on Gold

An escalation in regional tensions could keep oil prices elevated, reigniting inflation concerns. Higher energy costs could reinforce expectations that the Federal Reserve may need to raise interest rates or maintain restrictive monetary policy for longer.

This scenario would generally be negative for gold, as higher interest rate expectations and rising Treasury yields tend to reduce the appeal of the non-yielding precious metal.

2. Diplomacy Could Trigger a Gold Rebound

Intensified negotiations or mediation efforts could create a path toward de-escalation, easing inflationary pressures and reducing expectations of further Fed tightening.

If Trump rejects the proposed military strike plans or signals a preference for diplomacy, geopolitical tensions could subside. Under this scenario, gold could find room to rebound as concerns over energy supply disruptions and inflation begin to ease.

Gold Technical Analysis

The daily gold candlestick closed in a hammer pattern, but prices have yet to extend their recovery. Gold has been rejected twice at the $4,155 and $4,142 zones over the past two days. At the time of writing, the precious metal was trading below $4,100 during the Asian session.

This price action increases the risk of a breakdown below the $4,066–$4,073 support zone.

If this support area fails, selling pressure could extend toward $4,000 and potentially $3,965. A decisive break below support would strengthen the bearish outlook and expose gold to further downside.

However, if the $4,066–$4,073 zone holds, buying demand could help stabilize prices and trigger another rebound. In that case, the nearest recovery targets are projected around $4,135 and $4,155, although gains may remain limited.

A more substantial recovery would likely require meaningful geopolitical de-escalation or clear signs that the parties involved are prepared to return to the negotiating table.

For now, traders should closely monitor US Treasury yields, developments in the Middle East, and gold's reaction to the $4,066–$4,073 support zone to assess the next potential market direction.

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Gold Faces Downside Risks

 

Gold Market Overview

Market Drivers

Interestingly, US 10-year Treasury yields rose on Monday and during Tuesday's Asian session before losing momentum and turning lower. However, yields did not fall below Monday's lows. This reversal also undermined the US Dollar's early-session strength, with the greenback eventually closing lower.

Despite the weaker US Dollar and declining Treasury yields, gold failed to extend its gains. The overnight rally stalled at $4,155 before prices reversed lower and ended the session on a weaker note.

Geopolitical developments once again drove market sentiment on Tuesday. Positive headlines surrounding US-Iran mediation initially triggered a sharp decline in oil prices, pushing crude back below $100 per barrel and briefly toward $95. This provided relief for gold, which had initially fallen to around $4,111 during the early Asian session before rebounding quickly to $4,155.

However, the recovery failed to continue as renewed geopolitical uncertainty dampened optimism about a potential diplomatic breakthrough.

Three Geopolitical Risks Pulling Markets in Different Directions

Overall, there has been no significant change in the broader geopolitical landscape. The latest headlines that initially triggered a rapid gold rebound, alongside a sharp decline in oil prices, quickly lost their influence, sending gold lower again.

Nevertheless, gold remains broadly range-bound, with neither bullish nor bearish momentum strong enough to signal a significant change in the overall trend.

Gold briefly climbed back to $4,155 following reports that Iran and the United States were moving closer to a potential agreement that could address both sides' demands. Mediators from Qatar and Pakistan reportedly outlined a framework involving nuclear concessions sought by Washington and the release of frozen Iranian funds.

Under the reported proposal, Iran would agree to inspections of its nuclear facilities by an internationally agreed body, while the United States would release Iran's frozen assets. However, the reports had not been officially confirmed by either side, and gold subsequently reversed lower.

At least three major geopolitical developments remain key concerns for financial markets.

1. Iran–US Relations

Iran and the United States are continuing discussions this week, raising hopes of diplomatic progress. The United States has refrained from launching large-scale attacks against Iran for several weeks, while Iran continues to attack oil tankers navigating the Strait of Hormuz.

The outcome of these negotiations remains crucial for oil supply expectations, inflation risks, and gold price movements. Any meaningful progress toward an agreement could ease concerns over energy disruptions, while a breakdown in negotiations could trigger renewed market volatility.

2. Houthi–Saudi Arabia Tensions

The situation between Houthi forces and Saudi Arabia remains uncertain, with the risk of further escalation still present. Continued attacks targeting Saudi Aramco's energy infrastructure and Riyadh's airport have heightened concerns about potential disruptions to regional energy supplies.

Markets therefore need to remain alert to the possibility of additional supply risks if Houthi attacks against Saudi Arabia persist or intensify. A deterioration in the situation could push oil prices higher, potentially increasing inflationary pressures and weighing on gold.

3. Russia–Ukraine Conflict

The unilateral energy ceasefire announced by US President Donald Trump last week failed to hold after Russia launched retaliatory attacks following Ukrainian strikes on Russian diesel infrastructure.

Although concerns were partially eased by an agreement between Trump and Russian President Vladimir Putin allowing Russia to sell diesel and other energy products to global markets, investors will continue monitoring diplomatic efforts and the risk of further military escalation between Russia and Ukraine.

Ultimately, successful mediation could create opportunities for de-escalation, potentially sending oil prices lower and supporting gold. Conversely, failed negotiations could increase the risk of further conflict, pushing oil prices higher and exposing gold to additional downside pressure.

Treasury Yields and Geopolitics Remain Key Drivers

No major US economic data releases are scheduled for tonight, leaving geopolitical developments and US Treasury yields as the primary drivers of market sentiment.

US Treasury yields remain a critical indicator for gold's direction throughout the week. If yields resume their decline, gold could regain its upward momentum. Conversely, a rebound in yields could place renewed pressure on the precious metal, potentially prompting traders to shift their strategies toward selling.

Traders should also closely monitor developments in the Middle East, particularly tensions involving Saudi Arabia and Houthi forces, as well as US-Iran negotiations and the Russia-Ukraine conflict.

Two potential scenarios could determine gold's next move:

• Geopolitical escalation: Rising tensions could push oil prices higher, reigniting inflation concerns and strengthening expectations of further Federal Reserve rate hikes. This scenario would generally be negative for gold.

• Diplomatic progress and de-escalation: Successful negotiations could reduce geopolitical risks and ease pressure on oil prices. Lower energy costs could moderate inflation concerns and reduce expectations of further Fed tightening, creating a more supportive environment for gold.

Overall, gold remains vulnerable to renewed selling pressure if geopolitical tensions intensify and Treasury yields rebound. However, sustained diplomatic progress and falling yields could help the precious metal recover. Traders should closely monitor these two key drivers before determining their next market positions.

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Gold Tests Support

 

Gold Market Drivers

US 10-year Treasury yields rebounded at the close of Monday's trading session, briefly strengthening the US dollar and making it difficult for gold to extend its gains. However, the dollar weakened this morning, while US Treasury yields opened lower, allowing gold to rebound after its earlier decline.

Geopolitical developments dominated market sentiment on Monday. Oil prices initially moved lower before reversing higher later in the evening. Nevertheless, the relatively limited trading range helped gold recover from some of its earlier losses.

Oil Markets Remain Vulnerable to Geopolitical Risks

Oil prices initially declined following reports that the United States had lifted sanctions on Russian fuel. The move helped gold advance during the early Asian session as lower oil prices eased some inflation concerns.

However, oil prices remained vulnerable to other geopolitical risks, eventually reversing their earlier decline and moving higher by Monday evening.

Two developments contributed to renewed market concerns.

First, Iran's navy reportedly claimed that the United States had launched an attack on the Konarak naval base using two light projectiles early in the morning. The report briefly raised concerns about a broader escalation, although the anticipated escalation did not materialize, allowing oil market concerns to ease.

Second, Yemen's Houthi group reportedly claimed responsibility for approximately six attacks against Saudi Arabia over the preceding 48 hours. The alleged targets included Aramco's Yanbu oil facilities, the Shaybah oil field, and airports in Riyadh and Abha.

The reported attacks also prompted Saudi Arabia to cancel this year's “Davos in the Desert” conference amid concerns about escalating geopolitical tensions.

These developments continue to expose oil markets to supply-side risks, potentially reinforcing inflation concerns and influencing expectations for Federal Reserve monetary policy.

US Economic Data and Treasury Yields in Focus

The US economic calendar is relatively light, with housing starts scheduled for 7:30 PM WIB and pending home sales due at 9:00 PM WIB. Both releases are considered medium-impact indicators, but their influence on gold prices is expected to remain limited.

US Treasury yields will remain a key driver of gold prices later tonight and throughout the week.

If Treasury yields resume their decline, gold could regain upward momentum. Conversely, a rebound in yields could put renewed pressure on the precious metal and encourage traders to shift toward selling strategies.

Geopolitical developments will also require close monitoring, particularly tensions involving Saudi Arabia and the Houthis, Iran and the United States, as well as the Russia-Ukraine conflict.

Two potential scenarios could influence gold prices:

1. Further geopolitical escalation: Rising tensions could push oil prices higher, reigniting inflation concerns and increasing expectations of further Federal Reserve rate hikes. This scenario could weigh on gold prices as higher interest rates increase the opportunity cost of holding non-yielding assets.

2. Intensified negotiations or mediation: Diplomatic progress could create a path toward de-escalation, easing pressure on oil prices and reducing inflation concerns. This could lower expectations for additional rate hikes and provide support for gold.

Gold Technical Analysis: XAU/USD Faces Key Support

The daily candlestick closed bearish after gold failed to break above the $4,200 level for the second consecutive session. Friday's high reached $4,199, while Monday's high stood at $4,190. Prices subsequently declined to $4,136 during Monday evening before the session closed.

Technically, this price action could open the door to further downside movement. However, stronger selling pressure would likely be needed to break below the October 15, 2026, low at $4,099.

As long as the $4,099 support level remains intact, the downside pressure could remain limited, leaving room for a potential recovery.

On the upside, gold needs to reclaim the $4,190–$4,199 resistance zone, corresponding to Friday's and Monday's highs. A stronger bullish signal would emerge if prices break above $4,227.

For now, geopolitical developments and US Treasury yields remain the primary factors shaping gold's direction, particularly as the US economic calendar offers relatively few major data releases.

Traders should closely monitor the $4,099 support level and the $4,190–$4,199 resistance zone for potential breakout signals that could determine XAU/USD's next move.

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Gold Tracks Yields

 

Gold Market Drivers

US 10-year Treasury yields closed lower again, despite an initial rebound following three consecutive sessions of pressure. This morning, however, Treasury yields opened with a downward gap, while gold moved in the opposite direction, opening higher. The US dollar also weakened at the start of the session, extending the losses recorded over the previous two trading days last week.

Kevin Warsh’s remarks during a dialogue session with the IMF director on Friday offered few clues about the Federal Reserve’s policy direction ahead of its October 27–28 meeting. With limited US economic data scheduled this week, aside from the services and manufacturing PMI reports due on Friday, Treasury yields are likely to remain a key driver of gold prices. Oil prices will also attract attention as traders assess the latest developments in the Middle East.

Oil Volatility and Fed Rate Hike Bets

After climbing to around $101 per barrel on Friday evening, oil prices opened lower on Monday. Two factors contributed to the decline: President Donald Trump’s decision to lift sanctions and tariffs on Russian energy, and the latest futures contract opening below the previous contract’s closing price.

Nevertheless, oil prices are expected to remain volatile as geopolitical conditions continue to shift. Trump’s executive orders easing sanctions and tariffs on Russian energy have drawn bipartisan criticism. However, Trump stated on social media that the measures were intended to keep Russia engaged in peace negotiations with Ukraine.

For now, the policy shift is viewed as a potential counterbalance to renewed tensions in the Strait of Hormuz.

Over the weekend, Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy reportedly said that an oil tanker had exploded after striking a naval mine in the southern part of the Strait of Hormuz, citing Iranian media reports.

Another development that could ease market concerns is the possibility of Pakistan’s army chief visiting Iran this week. The prospect has raised hopes for continued diplomatic efforts between the United States and Iran.

However, reports about preparations for potential US strikes against Iran dominated headlines throughout last week. Trump did not rule out military action and reportedly raised the possibility of using a MOAB (Mother of All Bombs) against Iran. Nevertheless, he also signaled that an attack might not take place before the November 3 midterm elections, offering some temporary relief to geopolitical tensions.

Meanwhile, market expectations for a Federal Reserve rate hike next week have continued to decline. As of Monday morning during the Asian session, the CME FedWatch Tool showed a 14.9% probability of a rate hike on October 28, down from 16.1% previously.

With few major US economic releases scheduled this week and the Federal Reserve entering its blackout period, during which officials refrain from commenting on monetary policy, interest rate expectations may remain relatively stable.

However, a further escalation in geopolitical tensions could push oil prices higher, reigniting inflation concerns and potentially strengthening expectations for another Fed rate hike.

US Economic Data and Treasury Yields in Focus

Other US economic releases are unlikely to have a significant impact on market expectations for Federal Reserve policy. Among this week’s scheduled reports, the US services and manufacturing PMI data due on Friday could have some influence on gold prices, although the figures may not directly change interest rate expectations.

Beyond economic data and geopolitical developments, US Treasury yields are likely to play a crucial role in determining gold’s direction this week.

If Treasury yields continue to decline, gold could extend its recovery as lower yields reduce the opportunity cost of holding a non-yielding asset. Conversely, a rebound in yields could put renewed pressure on gold prices and prompt traders to reconsider their strategies, potentially shifting toward selling opportunities.

Geopolitical developments will also require close attention, particularly tensions involving Saudi Arabia and the Iran-backed Houthi group, US-Iran relations, and the ongoing Russia-Ukraine conflict.

Two scenarios could shape gold’s near-term outlook:

• Diplomatic progress and de-escalation: Intensified negotiations or mediation efforts could reduce geopolitical tensions and ease pressure on energy prices. Lower oil prices could subsequently moderate inflation concerns and reduce expectations for further Fed tightening. This scenario would generally be supportive of gold.

• Further geopolitical escalation: Renewed hostilities could drive oil prices higher and revive concerns about persistent inflation. Such developments could strengthen expectations for tighter Federal Reserve policy, potentially weighing on gold prices.

Gold Technical Analysis: Doji Signals Indecision

On the daily chart, gold formed a doji candlestick resembling a spinning-top pattern. Technically, this formation reflects market indecision, with neither buyers nor sellers establishing clear dominance.

The next directional move will depend largely on the following candlestick’s closing price relative to the previous session’s trading range.

A bullish close above Friday’s high of $4,199 would strengthen the case for further upside and suggest that buyers are regaining control. Conversely, a bearish close below Friday’s low of $4,147 would increase downside risks and indicate that selling pressure is gaining momentum.

Until a clearer technical signal emerges, gold may remain sensitive to changes in Treasury yields and geopolitical headlines.

With limited economic data scheduled for Monday, traders are likely to focus on developments outside the traditional economic calendar. For now, the US 10-year Treasury yield and geopolitical risks remain the two key indicators to monitor as the gold market searches for its next catalyst.

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Gold Shifts Focus

 

Market Drivers

US 10-year Treasury yields and the US dollar continued to decline during Thursday’s trading session, helping gold recover from the selling pressure that emerged following the US Consumer Price Index (CPI) report. Meanwhile, stronger-than-expected Producer Price Index (PPI) and retail sales data triggered a less severe reaction in gold than Wednesday’s inflation figures.

US PPI rose 1.3% month over month, significantly exceeding expectations of 0.6% and accelerating from the previously revised 0.5% reading.

Retail sales increased 0.8%, beating forecasts of 0.3% but slowing from the previous month’s 1.3% growth. Core retail sales also climbed 0.9%, above expectations of 0.6% but below the previous reading of 1.4%.

Meanwhile, regional manufacturing indicators delivered mixed signals. The Philadelphia Fed Manufacturing Index fell from 37.8 to 20.9, while the NY Empire State Manufacturing Index rose from 7.60 to 25.50.

Kevin Warsh Keeps Markets Guessing

One possible reason gold avoided a deeper decline despite stronger-than-expected economic data was that investors preferred to wait for comments from Federal Reserve Chair Kevin Warsh at the ongoing International Monetary Fund (IMF) meetings.

Warsh participated in a question-and-answer session with IMF Managing Director Kristalina Georgieva.

During the discussion, Warsh said the global economic environment had generally evolved in line with the Fed’s expectations since the September FOMC meeting. He reiterated the central bank’s commitment to price stability but declined to offer specific guidance on its remaining policy decisions in 2026.

The Fed has two scheduled policy meetings remaining this year, in October and December. Warsh described these meetings as important opportunities to assess economic growth, employment conditions, and inflation.

His cautious approach came as little surprise. Warsh has repeatedly argued that the Fed should avoid communicating its intentions too explicitly, allowing markets to form their own assessments of economic conditions. He has also consistently resisted providing advance signals about future interest rate decisions.

AI Investment Could Complicate Inflation

Much of Warsh’s discussion focused on investment and artificial intelligence (AI). He described the surge in structural investment as an important positive development for the global economy.

According to Warsh, AI technology has the potential to boost productivity and generate greater economic wealth. However, the transition is likely to be uneven, while its short-term impact on employment remains uncertain.

He also noted that AI investment could increase demand before productivity gains deliver supply-side benefits that help ease inflationary pressures. This dynamic could make it more challenging for central banks to assess economic data and determine the appropriate monetary policy response.

If AI-related investment increases spending in the near term while productivity improvements take longer to materialize, inflationary pressures could intensify before the longer-term benefits emerge.

This view aligns with Warsh’s previous argument that current interest rates may not be sufficiently restrictive to slow economic activity.

The Fed is also scheduled to hold an AI-related hearing in the San Francisco Bay Area on November 16. Meanwhile, its next monetary policy meeting is scheduled for October 27–28.

Economic Data and Geopolitics Remain in Focus

The next major US economic release is industrial production, scheduled for 20:15 WIB. The data is not expected to have a significant impact on gold unless it delivers a substantial surprise.

Investors will also monitor whether other Fed officials make additional comments following Warsh’s remarks at the IMF meetings.

Geopolitical developments remain another key factor heading into the end of the trading session. There have been no significant changes in the Middle East, with market concerns still centered on tensions involving the Houthis and Saudi Arabia, developments in oil markets, and diplomatic mediation between Iran and the United States.

Any de-escalation in geopolitical tensions could support further gains in gold by easing uncertainty and potentially reducing inflation concerns associated with energy prices. Conversely, an escalation could complicate the market outlook and limit gold’s upward momentum, depending on its impact on the US dollar, Treasury yields, and safe-haven demand.

Treasury Yields Could Determine Gold’s Next Move

Beyond economic data and geopolitical developments, US Treasury yields are likely to play a crucial role in determining gold’s next direction.

Warsh’s remarks did not prove as hawkish as some market participants had feared, leaving bond yields as an important driver for the precious metal.

If US Treasury yields continue to decline, gold could extend its recovery as lower yields reduce the opportunity cost of holding a non-yielding asset.

Conversely, a rebound in Treasury yields could put renewed pressure on gold prices and potentially force traders to reconsider their strategies, including shifting from buying to selling.

For now, the direction of US Treasury yields remains a key signal for gold traders as they weigh the latest economic data, the Fed’s policy outlook, and geopolitical risks.

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Gold Targets $4,217

 

Dupoin Futures Indonesia forecasts that global Gold prices (XAU/USD) could move higher on Thursday, October 15, 2026, with potential upside targets at $4,195 and $4,217, provided the key support level remains intact.

According to Dupoin's technical analysis, the bullish outlook remains valid as long as Gold holds above the $4,110 support zone.

“Upside potential remains open as long as $4,110 holds as support, with targets at $4,195 and $4,217,” Dupoin stated in its analysis.

However, Dupoin also outlined an alternative scenario if Gold prices break below the $4,110 support level. In that case, XAU/USD could extend its decline toward $4,073 and $4,051.

“The alternative strategy below $4,110 points to $4,073 and $4,051,” Dupoin noted.

Gold Technical Analysis

Technical indicators suggest that Gold's near-term outlook remains constructive, with buying momentum showing signs of strength.

The Relative Strength Index (RSI) is trading above the neutral 50 level, indicating that bullish momentum remains relatively dominant.

Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is positioned above its signal line and remains in positive territory. This configuration reinforces the possibility of further upside in the near term.

From a moving-average perspective, XAU/USD is trading above the 20-period Moving Average (MA) at $4,104 and the 50-period MA at $4,126. Holding above these indicators suggests that the short-term price structure remains supportive of a potential recovery.

Gold is also reported to be trading above the upper Bollinger Band, reflecting strong buying pressure. However, traders should remain alert to the possibility of a short-term pullback after a relatively strong advance, as prices may be vulnerable to profit-taking.

XAU/USD Price Outlook: Key Levels to Watch

The $4,110 level remains the key technical threshold for determining Gold's next move.

As long as prices hold above this support, the upside targets at $4,195 and $4,217 remain in focus. A sustained move higher could reinforce the bullish outlook and extend the recovery.

Conversely, a decisive break below $4,110 would weaken the bullish structure and expose Gold to further losses toward $4,073 and $4,051.

Gold traders will therefore closely monitor price action around $4,110 to assess whether bullish momentum can continue or selling pressure is likely to return.

For context, XAU/USD closed lower at $4,096 on Wednesday, October 14, 2026, ahead of Thursday's projected recovery.

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Inflation Drives Gold

 

Gold Market Outlook

US Treasury yields on 10-year notes declined, putting additional pressure on the US dollar and helping prevent gold prices from extending their losses overnight. However, markets remain cautious amid escalating geopolitical tensions and anticipation of the latest US inflation data due later today.

Rising oil prices have renewed concerns about inflation, creating headwinds for gold. Nevertheless, comments from Federal Reserve officials helped ease some market anxiety, allowing gold to rebound toward the end of Tuesday’s trading session.

Collins Highlights Inflation Risks, Williams Calms Markets

Susan Collins, President of the Federal Reserve Bank of Boston, said economic uncertainty remains elevated and that she is monitoring how broadly inflationary pressures are spreading throughout the economy. Her comments followed earlier remarks supporting another interest rate hike before the end of 2026.

Collins highlighted investment in artificial intelligence (AI) and data centers, tariffs, and energy costs associated with the Middle East conflict as potential sources of persistent inflation.

These factors are important for markets because higher gasoline prices can directly increase headline inflation. However, broader increases in goods and services prices would suggest that inflationary pressures are becoming more deeply embedded in the economy, potentially giving the Fed a stronger reason to tighten monetary policy further.

This distinction could provide important clues about how markets respond to tonight’s Consumer Price Index (CPI) release.

Meanwhile, John Williams, President of the Federal Reserve Bank of New York, offered a relatively reassuring message. Although he reiterated that one additional interest rate hike this year could be appropriate, Williams said he currently sees no need for another increase in 2027.

Williams expects inflation to slow significantly next year, potentially moving closer to the Fed’s 2% target. He noted that broader price pressures outside the AI technology and energy sectors remain limited and that he sees no evidence of labor market conditions driving inflation higher.

His comments helped ease concerns about additional monetary tightening in 2027, putting downward pressure on the US dollar and Treasury yields. However, Williams did not signal that interest rate cuts are on the horizon.

Despite the latest developments, geopolitical risks remain elevated following Houthi attacks on Saudi Aramco energy facilities and retaliatory Saudi strikes against the Houthis. Uncertainty surrounding the Russia-Ukraine ceasefire also continues to influence market sentiment.

Against this backdrop, investors are likely to treat the upcoming CPI report as a key indicator ahead of the Federal Open Market Committee (FOMC) meeting scheduled for October 27–28.

US CPI Forecast and Potential Market Reactions

The US CPI report is scheduled for release at 19:30 WIB. Headline inflation is forecast to rise by 0.6% month over month (MoM) and 3.7% year over year (YoY), although some economic calendars indicate a consensus estimate of 3.6% YoY.

Core CPI is expected to increase by 0.2% MoM and 2.4% YoY, while some calendars show a forecast of 2.5% YoY.

The main focus will be on core inflation and the breadth of price increases across the economy. A stronger core CPI reading could revive expectations for an October Fed rate hike, while softer inflation could give policymakers more room to delay further tightening.

The following scenarios outline potential market reactions to the CPI release.

Scenario 1: Inflation Exceeds Expectations

Assumptions: Headline CPI rises above 3.7%, while core CPI exceeds 2.6%.

Potential market reaction: The US dollar could strengthen sharply, putting substantial pressure on gold. XAU/USD could fall toward multiple lower support levels, with a break below the psychological $4,000 threshold becoming a significant downside risk.

Scenario 2: Inflation Falls Below Expectations

Assumptions: Headline CPI comes in below 3.5%, while core CPI falls below 2.4%.

Potential market reaction: The US dollar could weaken significantly, potentially supporting a strong gold rebound. XAU/USD could advance toward several higher resistance levels, with a breakout above $4,255 becoming a possibility.

Scenario 3: Mixed Data With Softer Core Inflation

Assumptions: Headline CPI remains above 3.6%, while core CPI falls below 2.4%.

Potential market reaction: The US dollar could strengthen moderately, initially weighing on gold before a potential recovery. Downside pressure could be limited around $4,100, or potentially $4,060, followed by a rebound toward $4,200–$4,235.

Scenario 4: Mixed Data With Hotter Core Inflation

Assumptions: Headline CPI comes in below 3.5%, while core CPI rises above 2.6%.

Potential market reaction: The US dollar could weaken modestly, but gold’s upside may remain limited because elevated core inflation could sustain concerns about further Fed tightening. A decline below $4,060 would remain possible.

Given the unstable geopolitical environment, traders should be cautious about assuming that the initial market reaction to CPI will persist. Oil prices and developments in the Middle East could continue to influence sentiment, meaning geopolitical risks may prevent a sustained gold recovery until clearer signs of de-escalation emerge.

Gold Technical Analysis: Daily Chart

The daily gold candlestick closed bearish, although its structure resembles both a shooting star and an inverted hammer.

Following the rebound that began on Thursday, October 8, and the subsequent correction on Monday, October 12, the candle could be interpreted as an inverted hammer. This formation would suggest the potential for gold to resume the upward move that began on October 8.

Conversely, if the candle is viewed as a rejection of resistance near $4,217, the high recorded on Monday, October 12, it could represent a shooting star within the broader decline that began on September 28. Under this interpretation, downside pressure would remain dominant.

The next daily close will be crucial in determining which scenario gains confirmation.

If gold closes below Tuesday’s low of $4,146, the shooting-star interpretation would gain strength, increasing the likelihood of a continued decline. This bearish signal would be reinforced by a hotter-than-expected CPI reading.

On the other hand, a daily close above Tuesday’s high of $4,200 would strengthen the recovery scenario. In that case, resistance between $4,217 and $4,227 could become the next upside target, particularly if inflation data comes in softer than expected.

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