Gold (XAU/USD) edged back above the $4,000 psychological level in Monday’s Asian session after touching a three-month low, as the US Dollar softened alongside a sharp pullback in US bond yields from multi-year highs. President Donald Trump ruled out immediate military action against Iran, which helped cool crude oil prices, while Federal Reserve officials indicated no urgency to raise rates. Even so, macro data kept tightening risk in view: S&P Global’s flash Manufacturing PMI rose to 56 in October, a 53-month high, beating 55.6, while Services PMI was 57.9 versus 58.8 in September and the Composite Output Index slipped to 57.6 from 58.4. The output price index climbed to 59.8, its highest since August 2022, reinforcing persistent inflation concerns and limiting upside for the non-yielding metal.
Geopolitical Developments and Economic Data
Oil had earlier jumped to its highest level since September 16 on supply fears linked to attacks in Saudi Arabia and Iran-related tensions, and Yemen’s Iran-backed Houthis said on Sunday they would keep targeting King Khalid Airport in Riyadh. Markets are also braced for US releases on Thursday, including Advance Q3 GDP and the PCE Price Index, with the two-day FOMC decision due Wednesday; attention will be on the rate statement and Chair Kevin Warsh’s press conference. Rate calls from the RBNZ, the ECB and the BoJ add to event risk.
Technical Outlook
Technically, the break below $4,100 and failures at the 100-period EMA keep the near-term bias bearish, with resistance near $4,100 and the 100-period EMA at $4,135.95; a sustained move above that level would open a path towards $4,200.
