Gold retains bearish bias near November 2025 lows; eyes US PCE amid receding Fed hike bets
- Gold attracts sellers for the third consecutive day and seems unaffected by a modest USD pullback.
- Traders trim Fed rate hike bets amid easing inflationary concerns, capping gains for the Greenback.
- Traders now look for the US PCE data for more cues about the Fed’s policy path and a fresh impetus.
Gold (XAU/USD) meets with a fresh supply during the Asian session on Thursday and slides back to the lowest level since November 2025, set the previous day. The commodity retains bearish bias for the third straight day as traders look forward to the release of the US Personal Consumption Expenditures (PCE) Price Index. The crucial data will dictate the Federal Reserve's (Fed) policy path and directly affect the non-yielding bullion.
In the meantime, inflation fears have receded recently as Crude Oil prices have fallen significantly following the reopening of the Strait of Hormuz. Furthermore, a temporary 60-day sanctions waiver that authorizes the production, delivery, and sale of Iranian crude oil, petroleum, and petrochemical products dragged the black liquid to its lowest level since before the US-Iran war. This should alleviate upstream pressure on consumer inflation, forcing traders to scale back their bets on Fed interest rate increases. The resultant decline in US Treasury bond yields caps any further appreciation of the US Dollar (USD), though it fails to provide any respite for the Gold price.
According to CME Group's FedWatch Tool, market participants are still pricing in over an 80% chance that the US central bank will raise borrowing costs by the end of this year, which should help limit any meaningful USD fall. Meanwhile, a global selloff in technology stocks earlier this week continues to weigh on investors' sentiment and should also support the safe-haven Greenback. This, in turn, backs the case for a further near-term depreciation of the Gold price, suggesting that any attempted recovery could be sold into and remain capped. Moreover, acceptance below the $4,000 psychological mark further validates the negative outlook for the precious metal.
XAU/USD 4-hour chart
Gold bears are not ready to give up yet, despite oversold RSI
Against the backdrop of the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart, the overnight break below the previous year-to-date low and the $4,000 mark were seen as a fresh trigger for the XAU/USD bears. That said, the Relative Strength Index (14) hovers near oversold territory around 28, suggesting that the pace of the decline could slow. Hence, it will be prudent to wait for some near-term consolidation or a modest bounce before positioning for deeper losses.
Meanwhile, the negative Moving Average Convergence Divergence (MACD) reading below zero and its recent deterioration suggest that any rebounds may struggle while the XAU/USD pair trades well beneath the 100-period SMA near $4,258.00. In the meantime, any meaningful recovery beyond the $4,000 mark might now attract fresh sellers near the $4,065-$4,070 region. This should cap the XAU/USD pair near the $4,100 mark. Bulls would need to clear the said barrier to ease immediate bearish pressure and open the door to a more sustained move higher to the 100-period SMA cap.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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