Gold prices (XAU/USD) fell on Thursday, October 29, slipping below $4,050 during Asian trading and ending a three-day winning streak. After reaching a weekly high in the previous session, the precious metal retreated as the US Dollar regained strength following its post-Federal Reserve (Fed) meeting pullback.
The renewed dollar demand, combined with expectations of tighter US monetary policy and persistent geopolitical uncertainty, has complicated gold’s recovery. On the daily chart, XAU/USD remains within a broader descending channel, with bearish momentum keeping the $4,000 psychological level and nearby support zone firmly in focus.
The Federal Reserve left interest rates unchanged at its October policy meeting in a 10–2 vote. However, two policymakers reportedly favored a 25-basis-point rate increase, highlighting concerns over persistent inflation and the potential need for further monetary tightening.
Fed Chair Kevin Warsh reiterated the importance of monitoring inflationary pressures and geopolitical risks. Markets have subsequently increased their focus on the possibility of another rate hike in December. Higher interest rates generally weigh on gold because the non-yielding metal becomes less attractive relative to interest-bearing assets. Expectations of tighter monetary policy can also support the US Dollar, making dollar-denominated gold more expensive for buyers using other currencies.
This combination has created a challenging environment for XAU/USD. Although uncertainty can encourage safe-haven demand, a stronger dollar and rising rate expectations may exert greater short-term pressure on gold prices.
Technical Analysis
Gold remains under bearish pressure on the daily chart, trading near $4,030 within a descending channel. The RSI at 38.62 sits below its average of 40.71, while the negative MACD confirms persistent downside momentum.
Support is located at 4,000–3,965, with further levels at 3,945–3,930 and $3,915. A break below $3,965 could expose these lower targets. On the upside, resistance lies at $4,065, followed by 4,125–4,185 and 4,260–4,285. Reclaiming $4,065 could prompt a relief rally, while a sustained move above $4,185 would strengthen the bullish case.
Markets are awaiting US third-quarter GDP and PCE inflation data for clues about the Fed’s next policy move. Strong growth or sticky inflation could reinforce rate-hike expectations, boosting the dollar and weighing on gold. Weaker figures could ease tightening concerns and support XAU/USD, with Treasury yields providing an additional signal.
For traders, the $3,965 support and $4,065 resistance are the immediate levels to watch. A confirmed break of either boundary could reveal the next directional move. Combining price action with economic data and shifts in dollar strength may help traders assess breakout opportunities and manage risk amid heightened volatility.
