Gold prices appear to be moving in a sideways fashion as traders prepare for the Fed’s interest rate decision today.
Research Takeaway
Gold is moving in a predominantly downwards fashion, as traders await the Fed’s interest rate decision later on today. The majority of market participants are anticipating the bank to remain on hold, with FFF currently implying a 77% probability for such a scenario to materialize. Any indications of a rate hike in the near future could aid the greenback whilst weighing on the precious metal’s price and vice versa. In our view, we wouldn’t be surprised to see the precious metal moving lower.
Research Desk View: BEARISH
Gold in One Minute
| Metric | View |
| Bias | Bearish |
| Primary Driver | DXY |
| Main Risk | Fed decision |
| Key Level | Hold below $4080 to preserve the thesis |
| Next Catalyst | Fed decision · 28/10/2026 / 20:30 GMT+2 |
The Gold Thesis
The markets may be preparing for the Fed’s interest rate decision today. As things stand, FFF currently implies a 77% probability for the bank to remain on hold in their meeting today. However, when looking at the recent inflation metrics from the US, we can see that inflation has accelerated in the most recent inflation print, which could be of concern for the Fed moving forward. In turn, we wouldn’t be surprised to see the Fed Chair Warsh’s press conference being perceived as hawkish in nature, which could provide support for the greenback whilst weighing on gold’s price given the inverse relationship between the two assets. Our main concern still remains with the Middle East, with the WSJ reporting that the US has warned its allies that they may resume strikes against Iran, which could result in a rapid escalation of tensions in the region. Thus, gold may find some support as the US Mid-Terms approach.
Gold Drivers
| Driver | Signal | Rationale |
| Rates | Bearish | US 10YR increasing |
| Risk Demand | Bullish | US may strike Iran |
Key Events
| Event | Date / Time | Prior – Anticipated – Actual | Potential Impact on Gold |
| Fed decision | Wednesday / 20:30 GMT+2 | [Prior: 3.75-4.00%] – [Anticipated: 3.75-4.00%] – [Actual: N/A] | Could aid gold’s price |
Technical Context
XAU/USD appears to be moving in a downwards fashion. We opt for a bearish bias for the bullion. For our bearish to be maintained, we would require a break below 3945 (S1) support level with the next possible target for the bears being our 3820 (S2) . On the other hand, for a sideways outlook, we would require gold’s price to remain confined between our 3945 (S1) support level 4080 (R1) resistance line. Lastly, for a bullish outlook we would require a clear break above our 4080 (R1) support level, with the next possible target for the bulls 4200 (R2) resistance line.
Short-Term Gold Levels
| Level | Price |
| Support (1) | $3945 |
| Support (2) | $3820 |
| Resistance (1) | $4080 |
| Resistance (2) | $4200 |
| Horizon | Next week |
What Changes the View
| Signal | Development |
| 🟢 Confirms the Thesis | Hawkish Fed commentary |
| 🟢 Confirms the Thesis | Stronger USD |
| 🔴 Challenges the Thesis | Gold gaining as fears for a US strike on Iran gain momentum |
| 🔴 Challenges the Thesis | Dovish Fed commentary |
The Gold Lens
The Fed’s decision may shake the markets, considering the state of the US economy and the possible impact of the Fed’s communication for the bank’s stance until the end of the year. Moreover, if that wasn’t enough there are reports of the US preparing to strike Iran heavily once the mid-terms are over, which further complicates the matter.
Key Variables to Remember
| Indicator | Bullish for Gold | Bearish for Gold |
| Real yields | Falling | Rising |
| US Dollar | Weakening | Strengthening |
| Fed expectations | More easing | More tightening |
| Central-bank demand | Increasing | Weakening |
| ETF flows | Inflows | Outflows |
| Risk environment | Uncertainty | Risk appetite |
DISCLAIMER: This content is for general informational and educational purposes only and should not be considered investment advice or investment recommendation.
