Last Updated on 27/10/2026
- Gold recovers some of its recent losses, trading near $4,010 during early Asian trading on Tuesday.
- Expectations of a de-escalation in US-Iran tensions lend support to Gold prices.
- The Federal Reserve is widely expected to leave interest rates unchanged at its October meeting on Wednesday.
Gold (XAU/USD) climbed to around $4,010 during early Asian trading on Tuesday, ending a two-day losing streak. The precious metal gained support as declining oil prices eased inflation concerns ahead of this week’s Federal Reserve (Fed) policy meeting.
Crude oil prices fell on hopes of reduced tensions between the United States and Iran. CNBC reported that Saudi Arabia’s Defense Minister met with Iranian leaders in Tehran on Monday to discuss easing bilateral tensions. While the development helped ease concerns over inflation, the relief may prove short-lived.
Bob Haberkorn, senior market strategist at StoneX, attributed gold’s recovery to lower crude prices and bargain-hunting. He expects trading to remain relatively subdued around the $4,000 level as investors await the Fed’s policy announcement.
Fed Rate Decision in Focus
Markets are closely watching Wednesday’s Fed interest rate decision. The US central bank is widely expected to keep its benchmark interest rate unchanged at 3.75%–4.00%, following its September rate increase.
According to the CME FedWatch tool, markets are pricing in approximately a 10% probability of another 25-basis-point rate hike on Wednesday, while nearly 82.3% anticipate at least one additional hike by the end of the year.
The Fed’s policy outlook remains a key driver for gold, as higher interest rates tend to increase the opportunity cost of holding non-yielding assets such as bullion.
Gold’s Bullish Outlook Faces a Test Near $4,000
TD Securities warned that gold’s longer-term bullish outlook is being tested around the psychologically important $4,000-per-ounce threshold, with commodity trading advisors (CTAs) holding short positions across all major signals.
Systematic trading funds have increased selling pressure across momentum indicators, leaving gold vulnerable to further downside in the near term. Nevertheless, the bank noted that prices have demonstrated resilience, recovering relatively quickly after briefly trading below $4,000.
Despite a recent moderation in exchange-traded fund (ETF) inflows, the broader outlook remains supported by continued central bank purchases, which have been an important driver of gold demand.
TD Securities also identified $4,092 per ounce as a key level to watch. A sustained move above this threshold could prompt CTAs to cover their short positions, potentially strengthening the recovery.
Warsh Emphasizes AI-Driven Investment While Maintaining Policy Caution
Federal Reserve Chair Warsh’s speech received a score of 5.6 out of 10 on the FXS Speechtracker, below its historical average of 6.1, indicating a slightly weaker impact than usual.
Warsh highlighted rising investment activity, structural economic growth and artificial intelligence (AI) as an emerging source of demand and a potential tool for improving data reliability. However, he avoided committing to a specific policy direction for the October and December meetings, emphasizing global economic spillovers, financial stability and potential downside risks.
The FXS Fed Sentiment Index remained unchanged at 127.51, indicating that the speech did little to alter perceptions of the Fed’s hawkish policy stance. His remarks suggest that policymakers remain cautious and are not yet signaling a clear shift toward monetary easing.
Technical Analysis: Gold Faces Downside Risks Despite Its Rebound
Gold has recovered toward $4,010, but its technical outlook remains mixed as momentum indicators point to persistent selling pressure.
The Relative Strength Index (RSI) stands at 35.20, approaching oversold territory and suggesting that bearish momentum could be weakening. However, further confirmation is needed before concluding that a sustained recovery is underway.
On the downside, the reported technical levels require careful interpretation: the lower Bollinger Band is cited near $4,020, the middle band around $4,130 and the 100-day simple moving average (SMA) near $4,220. These figures appear inconsistent with the accompanying description of price trading above the moving averages and Bollinger Band levels.
As a result, the technical outlook should be verified against the original chart before treating these levels as reliable support or resistance.
Overall, gold’s recovery above $4,000 is supported by easing US-Iran tensions, softer oil prices and bargain-hunting. However, the upcoming Fed decision and persistent bearish positioning could limit gains. A sustained break above $4,092 may encourage short-covering, while renewed selling pressure could put the $4,000 threshold back under pressure.
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