Gold Under Pressure Amid Geopolitical Tensions and US Inflation Data
Gold (XAU/USD) began the week under pressure as Middle East tensions rose, including reports of a projectile striking a passenger terminal at King Khalid International Airport in Riyadh, while thin conditions from the US Columbus Day holiday kept volatility contained. Trading stayed subdued ahead of US inflation data, then shifted after the Bureau of Labor Statistics said annual CPI rose to 3.7% in September from 3.4%, beating the 3.6% consensus. Monthly CPI increased 0.6%, while core CPI rose 0.3%, prompting the CME FedWatch Tool to price the chance of a Federal Reserve rate hike at about 40% and pushing Gold down more than 1% to around $4,100.
Reversal Driven by Treasury Yields, Fed Speeches, and Technical Focus
Momentum turned in the second half as US Treasury yields fell sharply, helping Gold rebound 1.6% on Thursday and extend gains towards $4,200 as FedWatch’s October hike probability slid to about 10% after Fed Chair Kevin Warsh spoke at an IMF event. Bloomberg reported China may be shifting US securities to non-US custodians, with Canada’s holdings near $600 billion. With the Fed entering a blackout ahead of the October 27-28 meeting and only preliminary October S&P Global PMI releases due—where a drop below 50 could matter—focus stays on yields, oil-led inflation concerns and geopolitical headlines; technically, RSI remains below 50 and price sits under the 20-, 50-, 100- and 200-day SMA, with resistance at $4,190-$4,240 then $4,300-$4,330 and $4,510-$4,520, while support is seen at $4,100 and $4,000-$3,970.
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