Gold Hovers Near $4,000 as Dollar Firms Before Fed Decision

Gold traded around $4,007 per ounce in early European hours on Tuesday, struggling to build on modest overnight gains as the US dollar attracted buyers for a third consecutive session. The yellow metal dipped below the $4,000 psychological mark last Friday for the first time since mid-July, posting a weekly decline of 4%—its sharpest drop in four months. A firmer dollar, rebounding Treasury yields, and renewed inflation concerns stemming from elevated energy prices have weighed on the non-yielding asset. The geopolitical risk premium remains in play after Iran-aligned Houthis launched fresh attacks on Saudi Arabian targets, including crude pumping stations and Riyadh airport, while Lebanese group Hezbollah reportedly prepares for possible renewed hostilities with Israel.

The dollar index held near 102.00, close to a one-week high, reducing gold's appeal for overseas buyers. Ten-year Treasury yields edged higher to 4.99%, up from 4.98% on Friday, as markets digested the prospect of further Federal Reserve tightening. Money managers have aggressively cut exposure to precious metals in recent sessions, with the combination of waning risk appetite, a tech selloff, and geopolitically driven petroleum price spikes prompting defensive repositioning. Concerns that military activity in the Persian Gulf may escalate have paradoxically kept gold under selling pressure, as traders prioritize liquidity over traditional safe-haven flows.

What the calendar says

The Federal Reserve concludes its two-day policy meeting on 2026-10-28 at 18:00 UTC, with Chair Kevin Warsh scheduled to address the press shortly after the statement. Officials have signaled there is no urgency to raise rates at this meeting, yet traders are pricing an 82% probability of a 25-basis-point hike in December. Markets will scrutinize the accompanying statement and Warsh's comments for fresh guidance on the path of borrowing costs into early 2027, particularly as inflation concerns persist. Thursday brings the preliminary Q3 GDP and the September Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge targeting 2%. Looking further ahead, the US jobs report (nonfarm payrolls) is due on 2026-11-06 at 12:30 UTC, offering a fresh read on labor-market strength and its implications for monetary policy. Both events are expected to influence dollar dynamics and, by extension, gold.

Technical picture

The hourly chart shows XAU/USD trading at $4,006, maintaining a bearish near-term tone below the nine-day exponential moving average at $4,067. Price action continues to retreat from recent highs, and the Relative Strength Index sits at 35, just above oversold territory, indicating persistent downside pressure rather than an immediate recovery impulse. The daily bar has recovered slightly from a low of $3,991 but remains inside Friday's range, with the settle at $4,038 on December futures contracts. On the topside, initial resistance is defined by the nine-day EMA at $4,067, which caps rebound attempts and acts as the first hurdle for any corrective bounce. A break above that level would bring the $4,100 round figure into view, followed by the 200-period simple moving average at $4,198. On the downside, the June 30 low at $3,942 marks key support; a decisive close below that threshold could trigger a fresh leg lower toward the $3,900 to $3,800 zone. The path of least resistance for gold remains to the downside as long as price holds beneath the nine-day average.