Gold is revering a part of the previous decline, challenging the $4,000 mark as safe-haven flows return heading into the two-day US Federal Reserve (Fed) monetary policy meeting.  

Gold divided amid US-China trade optimism, Fed event risk

Markets seem to have turned risk-averse, biding time before the Fed policy announcements on Wednesday. Further, nervousness sets in as key US tech titans are due to release their earnings reports later this week.

Meanwhile, the US Dollar (USD) is languishing in weekly lows against its six major currency rivals, as traders look to reposition amid the US-China trade deal optimism and ahead of the Fed event risk.

These factors offer fresh support to Gold, helping the bright metal stage a comeback after having fallen for two trading days in a row.

Gold tumbled over 3% on Monday, as markets ignored the traditional safe haven in search of higher returns on renewed hopes that the US and China will reach a trade deal when US President Donald Trump and his Chinese counterpart Xi Jinping meet on Thursday in South Korea.

All eyes are now on the Fed’s monetary policy verdict and the daily technical setup for fresh trading impetus, as the US government shows no signs of reopening.

Markets are almost fully pricing in two interest rate cuts this year, with a 25 basis points (bps) cut seen on Wednesday. Therefore, the main focus will be on the language in the policy statement and Fed Chairman Jerome Powell’s words for fresh hints on the central bank’s path forward on rates.

Gold price technical analysis: Daily chart

The daily shows that Gold price defends the critical support at $3,973, which is the 38.2% Fibonacci Retracement (Fibo) level of the parabolic rise that kicked off in mid-August.

So long as the abovementioned level is held, Gold buyers will likely remain hopeful.

Meanwhile, the 14-day Relative Strength Index (RSI) flirts with the midline, struggling to find acceptance above it.

If the 50 level is reclaimed on a sustained basis, Gold’s rebound could gather traction toward the 21-day Simple Moving Average (SMA) at $4,061.

Recapturing the latter is critical to stretch the recovery to near the $4,100 hurdle, where a bunch of healthy resistance levels align.

Additional upside will challenge the $4,150 psychological barrier.

Conversely, a daily candlestick closing below the 38.2% Fibo support at $3,973 will initiate a fresh downtrend toward the 50% Fibo level of $3,847.

Further south, the upward-sloping 50-day SMA at $3,784 could rescue buyers.

Silver (XAG/USD) extends losses on Monday amid a positive market sentiment, following upbeat reports regarding a potential China-US trade deal. The white metal’s reversal from mid-October highs above $54.00 is approaching the $47.00 level.

Precious metals are on their back foot. Comments by US President Donald PrumpTrumpp showing confidence that he will reach a good deal with his Chinese counterpart Xi have reinforced investors’ optimism earlier this morning, adding negative pressure on traditional safe-havens like Silver.

Technical analysis: A bearish H&S pattern remains in play

The technical picture shows price action below the neckline of a bearish Head & Shoulders, at the $50.71 area, with the pattern’s measured target, at the 61.8% Fibonacci retracement of the September-October rally, at the $46.35 area.

The mentioned Fibonacci level and the area around $46.00, where the pair was contained on September 30 and October 2, are likely to pose significant support. Below here, the next target is the 76.2% Fibonacci retracement of the same cycle, near $44.00. 

To the upside, the October 22 and 23 highs, at the $49.40 area and the H&S neckline, right above $51, are likely to act as resistance now, ahead of the October 20 high at the $52.75 area.

XAU/USD Current price: $4,004.04

• Easing trade war tensions boosted the mood, weighing on the bright metal.
• The Federal Reserve will announce its monetary policy decision next Wednesday.
• XAU/USD struggles to retain the $4,000 mark, room for additional slides.

Spot Gold pierced the $4,000 level on Monday, as a better market mood trashed demand for the safe-haven metal. It currently trades near a fresh 3-week low of $3,971.63.

Relief came from trade-war-related headlines, as United States (US) Treasury Scott Bessent said that top US and China officials had drawn a framework ahead of US President Donald Trump and Chinese leader Xi Jinping meeting later this week. Such a framework, according to Bessent, will prevent fresh US tariffs on Chinese goods, and limit Beijing’s control on rate earths.

Wall Street surged amid confidence in a trade deal and ahead of the Federal Reserve (Fed) monetary policy announcement later this week. The central bank is widely anticipated to trim interest rates by 25 basis points (bps), the second cut in 2025. For companies, lower rates mean lower borrowing costs, hence, firmer stocks gains.

Other than that, the US government shutdown continues, meaning the macroeconomic calendar has little to offer apart from the Federal Open Market Committee (FOMC) decision.

XAU/USD short-term technical outlook

In the 4-hour chart, XAU/USD is currently trading at $4004, down for a second consecutive day. Price action sits beneath the near-term averages, with a bearish 20 Simple Moving Average (SMA) sliding south and now below the 100 SMA, suggesting sellers hold the grip and hinting at additional slides ahead. The 20 SMA stands at $4,085, while the 100 SMA is advancing at $4,109, creating a layered resistance band at $4,085–$4,109. The broader outlook remains underpinned by the rising 200 SMA at $3,927, which acts as the first meaningful support beneath the market, but the inability to reclaim the 20 SMA keeps the short-term tone biased lower.

At the same time, the Momentum indicator remains deeply below the 100 mid-line, aiming higher yet not enough to confirm a steeper recovery ahead. The Relative Strength Index (RSI) indicator hovers at 36, still below the neutral 50 threshold but ticking higher versus the previous close, pointing to fading downside pressure and scope for consolidation. Even so, as long as XAU/USD fails to clear the 20 SMA at $4,085 and the 100 SMA at $4,109, the path of least resistance remains to the downside toward the rising 200 SMA at $3,927. A firm recovery above $4,085–$4,109 would temper the bearish bias and open the door for a more sustained corrective bounce.

In the daily chart, a bullish 20 SMA runs above the current level, providing dynamic resistance at $4,066, while the 100 SMA is bullish, advancing at $3,560. The 200 SMA is also edging higher at $3322, reinforcing the broader positive bias and offering a deeper support level. A sustained break back above the 20 SMA would likely reassert the upward bias and open the door to additional gains.

That said, short-term signals have softened, as the Momentum indicator has accelerated south firmly below its 100 line, flagging increased selling pressure and a corrective tone. The RSI has cooled sharply from prior overbought levels and now hovers at 51, just above the neutral 50 mark, pointing to waning upside traction. While the bearish momentum raises the risk of further dips toward the aforementioned moving-average supports, the rising longer SMAs suggest pullbacks may remain contained. A recovery through $4066 would tilt the near-term bias back to the upside, whereas failure to reclaim it keeps risks skewed toward a deeper test of the 100 SMA at $3560.

(This content was partially created with the help of an AI tool)

Gold remains on its back foot on Monday amid moderate risk appetite, amid market hopes of a trade deal between the US and China. The precious metal depreciated nearly 2% on Monday, trading at a short distance from the $4,000 support area.

Comments by US President Donald Trump, reiterating his optimism about the chances of reaching a good trade deal with Chinese President Xi Jinping at their meeting later this week, have calmed concerns about further restrictions on global trade and are buoying market sentiment.

Technical Analysis: Gold is on a bearish correction from all-time highs

From a technical perspective, a look at the 4-hour charts shows bears in control, as price action corrects lower from all-time highs near $4,400. Upside attempts remained capped well below a previous support level at $4,185 last week, highlighting the bearish momentum.

On the downside, immediate support is at the $4,000 psychological area, where bears were capped on October 22. This level closes the path towards the October 9 and 10 lows, at $3,945, and the  61.8% Fibonacci retracement of the September 18 – October 17 bullish run, a common target for corrections.

Upside attempts remain capped below $4.150 (October 22 and 23 highs), below here, the previous support at the mentioned $4185 area might hold bulls ahead of the all-time high, near $4,380

Further down, the $3945 area, where the pair found support on October 7, 9, and 10, emerges as the next target ahead of the October 2 low, at $3,845. To the upside, the intraday high at the $4,160 area and the October 17 low at $4,185 are closing the path towards the all-time high at $4,380.

The rate cut is old news — Powell’s words are the catalyst

Gold is treading water around $4,080, trapped in a defined range between $4,004–$4,161, as traders prepare for the October 30 FOMC decision.

The market is no longer reacting to the rate cut itself — the CME FedWatch Tool shows a 96.7% probability that the Fed will cut rates by 25bps (4.25% → 4.00%), making the move fully priced in.

What’s not priced in, however, is the Fed’s tone during Powell’s press conference. If the Chair signals that more easing could follow — citing weaker growth or global risks — gold may find fresh fuel to break higher. But if Powell emphasizes caution or suggests a “cut and pause” approach, traders may see short-term profit-taking push prices back toward $4,000.

Adding to the complexity, US data remains disrupted by the government shutdown, with the Advance GDP report (forecast 3.0% vs 3.8% prior) expected hours after the FOMC. The combination of policy tone + GDP surprise could spark the next volatility burst in XAU/USD.

Fed rate decision impact on Gold

Fed Decision Timeline (UTC +8)

• Oct 30, 2:00 AM – FOMC Rate Decision (4.25% – 4.00%).
• Oct 30, 2:30 AM – Powell Press Conference.
• Oct 30, 8:30 PM – US Advance GDP (QoQ forecast 3%).

With the cut already priced, gold’s reaction hinges on the tone, not the decision:

If Powell leans dovish

• Mentions “further adjustments”, economic headwinds, or global weakness.
• Yields fall, USD softens, and gold breaks above $4,161, targeting $4,200–$4,300.
• Reinforces gold’s long-term uptrend backed by central-bank accumulation.

If Powell stays neutral or cautious

• Notes data-dependence and inflation vigilance.
• Market remains range-bound between $4,004–$4,161.
• Traders wait for GDP results or further data clarity to confirm direction.

If Powell sounds hawkish

• Suggests the Fed might pause easing or is “comfortable” with inflation levels.
• Dollar rebounds, real yields tick higher, and gold dips below $4,004, testing $3,944–$3,900.

Technical outlook (four-hour structure)

Gold remains in a sideways correction, holding firm above the 0.618–0.705 retracement zone of the October rally — a typical region for accumulation before continuation.

Bullish scenario: Breakout above $4,161

• Trigger: H4 close above $4,161.50, ideally backed by a dovish Powell or softer GDP data.
• Narrative: Confirms bullish continuation from the October low; upside momentum resumes.
• Targets:
• • $4,200 → $4,260 short-term.
  • $4,300 → $4,381 (ATH retest zone).
• Invalidation: H4 close back below $4,004 negates bullish breakout.

Bearish scenario: Breakdown below $4,004

• Trigger: Failed break above resistance followed by decisive close below $4,004.
• Narrative: Confirms exhaustion of bullish demand amid hawkish tone or strong GDP.
• Targets:
• • $3,944 → $3,900 (liquidity zone)
  • Possible extension to $3,860 (0.786 retracement support).
• Invalidation: Recovery and close above $4,161 restore neutral-to-bullish bias.

Big picture: Calm before the Fed

Gold’s macro structure remains bullish, but short-term sentiment is in pause mode.

• The rate cut is not the event — Powell’s guidance is.
• Traders should monitor press conference tone, not just the decision headline.
• A dovish lean or weaker GDP could quickly reignite momentum toward $4,300+.
• Conversely, any hint of pause rhetoric could trigger a temporary correction before long-term buyers reemerge.

Final thoughts

The rate cut itself is no longer the story — the market has already moved past that. What truly matters now is how Powell frames this decision and whether he signals a broader easing cycle or a temporary adjustment.

Gold’s recent behavior tells the story of patience rather than panic: it’s holding ground above $4,000, respecting structure, and awaiting clarity. The consolidation between $4,004 and $4,161 isn’t weakness — it’s compression before expansion. Once direction is confirmed, the move could be sharp and decisive.

If Powell leans dovish, gold has every reason to resume its climb toward $4,300–$4,381, supported by central-bank accumulation, lower real yields, and safe-haven demand amid global uncertainty.

But if the Fed hints at a pause or slower easing path, a brief pullback below $4,000 would be natural — a reset, not a reversal.

For traders, this week is all about reaction, not prediction. Let the Fed’s tone set the tempo, and trade the breakout from structure, not inside the noise.

Gold’s trend remains constructively bullish, and the market seems to be simply waiting — not wondering — for its next cue.

In short: The Fed’s decision is priced in. Powell’s tone isn’t.
The next breakout in gold will tell us which narrative wins.