Last Updated on 25/09/2026
- Gold prices edged lower to around $4,275 during early Asian trading on Friday.
- A renewed surge in oil prices fueled inflation concerns, reducing the attractiveness of gold.
- Hawkish remarks from Federal Reserve officials reinforced expectations of further interest rate hikes.
Gold (XAU/USD) edged lower to around $4,275 during Friday’s Asian trading session, extending recent losses as investors increasingly anticipate additional Federal Reserve interest rate hikes later this year. Market participants are also awaiting remarks from New York Fed President John Williams and Cleveland Fed President Beth Hammack later in the day.
Meanwhile, crude oil prices recovered after U.S.-Iran discussions failed to produce meaningful progress, reigniting concerns that higher energy costs could fuel inflation. At the same time, yields on long-term U.S. Treasury bonds climbed to their highest levels in more than twenty years. Rising oil prices and elevated bond yields have reinforced expectations that the Fed may need to maintain a tighter monetary policy stance to keep inflation under control.
According to the CME FedWatch Tool, markets currently assign a 67.5% probability to a 25-basis-point rate increase in October, up from 55.4% a week earlier. Higher interest rates generally create headwinds for gold, as the non-yielding asset becomes less attractive compared with interest-bearing investments.
Fed officials continued to deliver hawkish messages throughout the week. Cleveland Fed President Beth Hammack warned that inflation remains persistently elevated and could become increasingly difficult to bring back to target if pressures continue. Likewise, Philadelphia Fed President Anna Paulson emphasized that inflation still requires attention and suggested that additional rate hikes may be necessary.
Strong Chinese Demand Continues to Support Gold Market
Despite recent price weakness, analysts at Commerzbank highlight robust physical demand from China as a major pillar supporting the gold market in 2026. Customs data shows China imported more than 1,000 tonnes of gold during the first eight months of the year, already surpassing total imports recorded in the previous year.
Official purchases have further strengthened demand. The People’s Bank of China reportedly added more than 80 tonnes of gold between January and August, with buying accelerating in recent months and reaching the highest monthly level in nearly three years during August. As a result, China remains one of the most significant drivers of global gold demand this year.
Paulson Signals Openness to Further Tightening
Anna Paulson’s latest comments reflected a distinctly hawkish tone, indicating that the Fed could still raise rates again if inflation remains stubbornly above target. She noted that the September rate increase improved the Fed’s ability to combat inflation but suggested that underlying price pressures remain elevated, partly supported by investment linked to artificial intelligence expansion.
At the same time, Paulson acknowledged that the U.S. economy and labor market remain resilient, reinforcing the Fed’s focus on containing inflation risks rather than responding to economic weakness. The unchanged FXS Fed Sentiment Index at 148.18 also suggests that overall Fed communication continues to favor a restrictive policy stance, supporting expectations for higher rates and a stronger U.S. dollar.
Technical Outlook: Gold Faces Resistance Below 100-Day Moving Average
From a technical perspective, gold maintains a bearish near-term outlook while trading below both the 100-day moving average and the middle Bollinger Band on the daily chart. Although prices remain above the lower Bollinger Band, leaving room for a short-term rebound, the Relative Strength Index (RSI) near 44 indicates that downside momentum remains dominant without entering oversold territory.
Key resistance is located near the 100-day moving average around $4,310, followed by the Bollinger midpoint near $4,360. A stronger barrier sits around $4,480 at the upper Bollinger Band. On the downside, immediate support is seen near $4,240 at the lower Bollinger Band, with a break below this level potentially triggering a deeper correction toward lower support zones.
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