The current core tension for XAU/USD lies in the tug-of-war between "strengthening Federal Reserve rate hike expectations" and "geopolitical risk premium plus central bank gold purchases."
On the Fed side, Wednesday's FOMC voted 10-to-2 to keep rates unchanged at 3.75%-4.00%. Chairman Warsh declined to provide forward guidance but emphasized that "ensuring price stability is not tied to a fixed date on the calendar." The hawkish pause language kept market pricing for a year-end rate hike at elevated levels. US September core PCE came in at 3.1% year-over-year, in line with expectations, while rising 0.5% month-over-month (previous: 0.3%), indicating that inflation stickiness remains unresolved. CME FedWatch shows the probability of a 25 basis point hike in December at approximately 74.9%, down from 84.2% the previous day but still at a high level. The FXS Fed Sentiment Index jumped 14.39 points to 141.89, firmly in hawkish territory, reinforcing the "higher for longer" rate narrative.
On the geopolitical front, US-Iran diplomatic contact has eased some safe-haven sentiment, but events such as the tanker attack in the Strait of Hormuz and ongoing Houthi strikes mean that tail-risk pricing for Middle East supply disruptions has not been fully removed. WTI crude oil has returned above $104, providing indirect support for gold through inflation concerns. Additionally, TD Securities noted that industrial precious metals significantly underperformed gold after the FOMC, as macroeconomic headwinds and tightening policy expectations weighed on the industrial demand outlook. This divergence highlights gold's defensive characteristics within the precious metals sector.
In cross-comparison, gold's situation makes it more suitable for a range-bound approach rather than a one-directional bet. From a cross-asset linkage perspective, the current volatility is essentially a combination of four threads: first, the data dependence of the Fed's year-end rate hike path; second, the impact of evolving Middle East geopolitical conditions on safe-haven capital flows; third, the sustainability of global central bank gold purchase demand; and fourth, real-time changes in the US dollar index and real interest rates. Only when two or more of these threads resonate in the same direction does a trend-following move have a foundation.
On the daily chart, XAU/USD is trading near $4,015, with an overall bearish bias. The price is running below the 100-day SMA at approximately $4,215 and the Bollinger middle band at approximately $4,115, indicating that the medium-term trend remains under pressure. The price is hugging the Bollinger lower band near $3,995, which serves as the nearest primary support. The 14-day RSI is at approximately 38.23, in weak momentum territory but not yet oversold, suggesting downside pressure exists but the slope may be slowing. On the upside, resistance levels to watch in sequence are the Bollinger middle band at approximately $4,115 (the nearest primary threshold), the 100-day SMA at approximately $4,215, and the Bollinger upper band at approximately $4,230 (a valid breakout would be needed to reverse the bearish setup). On the downside, support first lies at the Bollinger lower band near $3,995; a valid break below could open further downside room, testing the $3,950 and $3,900 round-number levels.
On the 4-hour chart, the exchange rate is moving lower along short-term moving averages, with the MACD histogram hugging below the zero line. Momentum is bearish but has not yet confirmed acceleration, with the current price oscillating narrowly between $4,010 and $4,030.
The core tension for XAU/USD in the near term is that strengthening Fed rate hike expectations are pressuring gold prices, while geopolitical risk premiums and central bank gold purchase demand provide a floor of support. These two-way drivers make it more likely that gold prices will consolidate within the $3,995-$4,115 range, awaiting a breakout driven by US data and geopolitical developments. Looking ahead, three variables warrant close attention: first, US PCE data and Fed officials' remarks, which are the primary basis for judging whether the rate hike path will strengthen further; second, whether XAU/USD can effectively break above and hold $4,115 (the Bollinger middle band), which is the primary technical basis for judging whether the bearish setup will reverse; and third, the trajectory of the US dollar index and US Treasury yields, as a renewed strengthening of the dollar would weigh on gold. Additionally, Middle East geopolitical developments, global central bank gold purchase trends, the performance of industrial precious metals such as silver, and policy signals ahead of the December FOMC meeting should also be tracked simultaneously.
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