Gold traded around 4,130 USD per ounce on Thursday, remaining near its lowest levels since early August, although it is currently making a strong attempt to rebound. Pressure on the metal intensified following the release of the Fed minutes, which kept the prospect of another US rate hike before year-end alive. Elevated oil prices remain an additional factor, keeping inflation risks elevated.
Minutes from the September meeting showed that all 19 FOMC members supported the rate hike. In addition, most participants considered another rate hike before year-end likely to be appropriate.
At the same time, markets largely expect a pause at the October meeting. The probability of a rate hike in December is estimated at around 78%, which continues to limit demand for gold.
Oil, meanwhile, is rising following reports that the Donald Trump administration has asked the Pentagon to prepare options for strikes against Iran, potentially before the mid-term elections. Risks to shipping through the Strait of Hormuz also remain high, despite estimates that Middle East oil supplies have already recovered to pre-war levels.
Technical Analysis
On the H4 chart, gold remains in a downtrend. After forming a corrective range around 4,143 USD, the market attempted to move higher but failed to establish a foothold above resistance. Another downward move is currently developing, with the prospect of testing support at 4,104 USD. A break below this level would open the way for a further decline towards 4,066 USD, with 4,027 USD remaining the main target for sellers. At the same time, a preliminary corrective rise towards 4,215 USD is possible. The MACD indicator confirms that the bearish scenario remains intact: the signal line is below zero, while the histogram remains in negative territory, indicating that sellers continue to dominate.
On the H1 chart, the market completed its local downward move with a test of the 4,066 USD area, after which an upward correction developed. Buyers managed to push the price back above 4,104 USD and test resistance at 4,143 USD. A local consolidation range between 4,126 USD and 4,143 USD is now forming. A rejection from the upper boundary would signal a resumption of the downward move, initially targeting 4,104 USD. A break below this support would open the way for a further decline towards 4,066 USD and then 4,027 USD. The alternative scenario envisages consolidation above 4,143 USD, followed by a corrective move towards 4,171 USD. The Stochastic oscillator is in the overbought zone near 80 and is showing signs of turning downwards. This increases the likelihood that the current correction will end and renewed downward momentum will develop during the upcoming trading session. Selling remains the priority once a reversal from resistance is confirmed.
Conclusion
Gold is attempting to rebound but remains under pressure near its early-August lows, weighed down by hawkish Fed minutes and elevated oil prices that are keeping inflation risks elevated. While all 19 FOMC members supported the September rate hike, markets largely expect a pause in October, with the probability of a December rate hike at around 78%. Rising oil prices, amid reports of potential US strikes on Iran, are adding further uncertainty. Technically, gold remains in a downtrend, with support at 4,104 USD and downside targets at 4,066 USD and 4,027 USD if the decline resumes. A corrective rise towards 4,171 USD is possible if the price consolidates above 4,143 USD, but the overbought Stochastic suggests the correction may be nearing its end. The near-term outlook remains bearish unless resistance is decisively broken.
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