Last Updated on 02/11/2026
- Gold prices recover to approximately $3,895 during early Asian trading on Monday.
- Rising oil prices intensify inflation concerns, strengthening expectations of further Fed rate hikes.
- Markets continue to anticipate another Federal Reserve interest rate hike in December.
Gold (XAU/USD) recovered towards $3,895 during early Asian trading on Monday after sliding to a recent low of $3,870 in the previous session. However, the recovery remains fragile as elevated oil prices, persistent inflation concerns and expectations of further US monetary tightening continue to limit upside potential.
Markets are preparing for another volatile week, with escalating geopolitical tensions in the Middle East, upcoming US employment data and the midterm elections likely to drive uncertainty across financial markets. Renewed Ukrainian attacks on Russian oil refineries and Iran’s preparations for a potential confrontation with the US and Israel have added to geopolitical risks.
Despite the Federal Reserve holding interest rates steady at its October meeting, expectations of further tightening remain elevated. According to CME FedWatch, markets are pricing in a 72.9% probability of a US rate hike in December. Higher borrowing costs typically increase the opportunity cost of holding non-yielding assets such as gold.
Gold recovery remains fragile amid hawkish Fed expectations
OCBC strategists remain cautious about gold’s near-term outlook, noting that the metal has struggled to benefit from easing US Treasury yields and oil prices. Meanwhile, stronger-than-expected third-quarter GDP growth and September core PCE inflation of 3.1% year-on-year have reinforced expectations that the Fed may maintain its hawkish stance.
OCBC also highlights limited fresh buying interest, while weakness in technology stocks raises concerns about broader market deleveraging. Further consolidation or another test of recent lows therefore remains possible, with upcoming employment data, equity market movements, Treasury yields and the US dollar likely to influence gold’s direction.
Adding to the hawkish outlook, Fed official Logan indicated that at least two additional 25-basis-point rate hikes may be necessary to bring inflation under control. Her comments reinforce expectations of tighter monetary policy, potentially providing further support for the US dollar while weighing on gold prices.
Technical Analysis: XAU/USD remains under bearish pressure
Gold maintains a bearish technical outlook on the daily chart, trading below its major moving averages and key Bollinger Band levels. The Relative Strength Index (RSI) stands near 32, approaching oversold territory and indicating that downward momentum remains strong, although a short-term corrective rebound cannot be ruled out.
On the upside, immediate resistance stands around $3,910, followed by the Bollinger Band midpoint near $4,085. Further resistance is located around the 100-day SMA at $4,210 and the upper Bollinger Band near $4,265.
Overall, gold’s recovery remains vulnerable while prices stay below key technical resistance levels. A sustained move above $3,910 could offer initial signs of stabilization, while failure to hold current levels may expose the metal to further downside pressure.
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