Last Updated on 19/10/2026
- Gold prices edge higher toward $4,175 during early Asian trading on Monday.
- Fed Chair refrained from offering clear signals on an imminent policy shift during remarks at the IMF meetings in Bangkok.
- Geopolitical tensions, particularly developments surrounding US-Iran relations, remain key factors for gold traders to monitor.
Fundamental Analysis
Gold prices (XAU/USD) edge higher to around $4,175 during early Asian trading on Monday, recovering as expectations for further Federal Reserve (Fed) rate hikes begin to fade. Market participants remain focused on geopolitical developments and escalating tensions in the Middle East, which could influence gold’s near-term direction.
Despite stronger-than-expected US inflation data, market expectations for monetary policy have shifted. Fed Chair Kevin Warsh expressed confidence in the resilience of the US economy but refrained from providing clear guidance on the future interest-rate path. Traders largely expect the Fed to maintain rates at its October meeting, while markets are pricing in a 91.8% probability of a rate hike in December, according to the CME FedWatch Tool.
Gerald Gan, chief investment officer at Reed Capital Partners, noted that although inflation remains a concern and further tightening remains possible, Warsh’s latest remarks suggest limited urgency for consecutive rate increases.
Geopolitical developments are also drawing attention. US President Donald Trump reportedly reached a diesel export agreement with Russia and withheld certain sanctions to avoid undermining peace negotiations over Ukraine. Meanwhile, an Iranian official warned that Tehran had prepared a new retaliatory plan in the event of renewed US-Israeli attacks, while maritime authorities reported several incidents involving commercial vessels near the Strait of Hormuz. Continued conflicts in Eastern Europe and the Middle East could intensify concerns about oil-driven inflation, potentially influencing gold prices.
Global bond yields decline as AI growth concerns outweigh inflation pressures
Global bond yields moved lower as concerns over a potential slowdown in artificial intelligence-driven growth overshadowed stronger-than-expected US economic data. Deutsche Bank reported a broad-based rally in government bonds, with the US two-year Treasury yield falling 5.9 basis points to 4.74% and the 10-year yield declining 12.7 basis points to 5.06%. Yields on German Bunds, French OATs and Italian BTPs also retreated.
The bond rally occurred despite a significant upside surprise in US producer price inflation, with headline PPI rising 1.3% in September compared with expectations of 0.6%. The decline in yields suggests that concerns about the economic outlook and AI-related growth prospects are currently outweighing inflationary pressures. Falling US real yields and easing inflation expectations have provided additional support for gold, which tends to benefit from lower yields on non-interest-bearing assets.
Warsh highlights investment and AI demand risks while maintaining policy flexibility
Fed Chair Kevin Warsh struck a cautiously optimistic tone regarding US economic growth and investment, while emphasizing the uncertainty surrounding artificial intelligence’s impact on demand and employment. He identified the October and December policy meetings as important opportunities to assess incoming data on economic output, employment and inflation.
Warsh’s reluctance to commit to a predetermined policy path leaves the door open for further tightening if inflation remains persistent, while suggesting that the Fed is not necessarily prepared to pursue consecutive rate hikes. Although the Fed’s broader policy stance remains hawkish, the absence of a firm commitment to additional tightening has helped ease immediate pressure on gold.
Technical Analysis: Gold remains below key moving averages
Gold continues to face resistance from key technical indicators, keeping the near-term outlook cautious despite its latest recovery. On the daily chart, XAU/USD remains below the 20-period Bollinger Band middle line and the 100-day simple moving average (SMA), indicating that bullish momentum has yet to gain sufficient strength. The Relative Strength Index (RSI) stands at 45.92, reflecting subdued momentum without signaling oversold conditions.
On the downside, initial support is located near the lower Bollinger Band at $4,053.65. A break below this level could expose gold to further selling pressure.
On the upside, a daily close above the middle Bollinger Band at $4,185 would provide an initial signal of stabilization. Further resistance is positioned at the 100-day SMA near $4,240, followed by the upper Bollinger Band around $4,315.
Overall, gold’s recovery remains vulnerable while prices trade below key resistance levels. Easing expectations for aggressive Fed tightening and declining bond yields offer some support, but geopolitical developments, inflation risks and upcoming US economic data are likely to remain the main drivers of price action.
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