Last Updated on 30/09/2026
- Gold buyers remain cautious as markets price in at least one Fed rate cut by year-end.
- Falling US Treasury yields weigh on the USD, pulling it lower from a two-month high and providing support for gold.
- Traders await the US PCE inflation data for fresh direction ahead of Friday’s key US Nonfarm Payrolls report.
Gold (XAU/USD) is struggling to extend the previous session’s gains, moving sideways during Wednesday’s Asian trading session after rebounding from around $4,100, its lowest level since August 5. The downside remains relatively supported as falling US Treasury yields have pushed the US Dollar lower from a two-month high, providing some support for non-yielding gold. Traders are also likely to remain cautious ahead of several key US economic releases that could provide fresh direction.
The main focus today is the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, along with the final Q2 GDP reading. Markets will also watch the US ISM Manufacturing PMI on Thursday and the highly anticipated Nonfarm Payrolls (NFP) report on Friday. Comments from FOMC officials could further influence expectations for the Fed’s policy path, with potential implications for both the USD and gold prices.
US Data and Fed Expectations Keep the Dollar Supported
OCBC strategists highlight the US labor market report as the key event risk for markets this week. Current consensus expectations point to September payroll growth of around 90,000, down from 162,000 in August, while the unemployment rate is expected to remain at 4.1%. Although Fed Chair Kevin Warsh has highlighted initial jobless claims as a timely indicator of labor-market conditions, payroll growth remains one of the market’s primary gauges of employment health.
OCBC maintains its view that the USD could strengthen moderately toward the end of the year. However, the bank argues that current market pricing for almost four Fed rate hikes over the next 12 months appears aggressive unless demand-driven inflation becomes the dominant source of price pressures. Wage growth and rental inflation will therefore remain important indicators for future Fed policy expectations.
Meanwhile, US Treasury yields have eased from recent highs following a decline in crude oil prices and dovish remarks from New York Fed President John Williams, who suggested that the central bank does not need to rush its next policy move. The weaker-than-expected US Consumer Confidence Index, which fell to 81.9 in September, its lowest level since 2014, also contributed to some USD profit-taking and offered additional support to gold.
Despite these developments, markets continue to price a high probability of another Fed rate hike before the end of the year. Ongoing geopolitical tensions surrounding the US-Iran situation could also maintain demand for the safe-haven USD, limiting the upside potential for XAU/USD.
Expectations for a diplomatic resolution have weakened after US President Donald Trump rejected Iran’s proposal for a seven-day ceasefire. Meanwhile, Qatar’s attempts to facilitate negotiations between Washington and Tehran have made limited progress. Reports that the US could potentially resume major military operations after the midterm elections have further kept geopolitical risks elevated.
Given these uncertainties, traders may prefer to wait for stronger buying momentum before concluding that gold has established a firm bottom near $4,100.
XAU/USD Technical Outlook
Gold continues to find support around $4,100, which corresponds to the 78.6% Fibonacci retracement of the June-August advance. However, the MACD remains in negative territory, indicating that bearish pressure has not fully disappeared, while the RSI near 40 points to weak momentum rather than oversold conditions.
On the upside, the $4,227 area, corresponding to the 61.8% Fibonacci retracement, represents the first significant resistance. A move above this level could bring the 200-day EMA near $4,307 and the mid-range Fibonacci level around $4,317 into focus.
Further gains could encounter resistance around $4,406, representing the 38.2% retracement, followed by $4,517 at the 23.6% level.
On the downside, $4,100 remains the immediate support zone. A sustained break below this level could expose the previous swing low around $3,937 and increase the risk of a deeper correction toward that area.
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