Gold has come under mild selling pressure in Asian trading on Wednesday, hovering near $4,350 and giving back some of the gains from the previous rebound below $4,300. The precious metal remains locked in a narrow range that has held all week, with traders reluctant to place large bets ahead of the highly anticipated meeting between US President Donald Trump and Chinese President Xi Jinping later in the day.
Factors pulling gold in opposite directions
Gold is caught between two opposing forces. On one side, falling oil prices and softer US Treasury bond yields provide support. On the other, continued strength in the US dollar — driven by hawkish comments from Federal Reserve officials — acts as a drag.
Optimism over diplomatic efforts to reopen the Strait of Hormuz has weighed on crude oil, easing inflation fears and pulling bond yields lower. According to Kyodo News, a senior Iranian official said Iran would reopen the strait within seven days if the US lifts its blockade. President Trump told the UN General Assembly on Tuesday that he believes a US-Iran deal is possible after the November midterm elections. US Special Envoy Steve Witkoff added that mediators had shuttled between the two sides and completed a round of talks that he described as constructive.
Lower Treasury yields generally support non-yielding assets such as gold, and that dynamic has limited the metal’s downside. However, the dollar’s ongoing advance — underpinned by expectations that the Fed will keep interest rates higher for longer — has capped any rally.
Hawkish Fed versus softer yields
Boston Fed President Susan Collins delivered a notably hawkish speech on Tuesday. The FXStreet Speechtracker scored her remarks at 8.1, well above the historical average of 6.6, highlighting her concern that inflation remains above the 2% target. Collins explicitly supported last week’s rate hike and emphasised upside inflation risks, adding that a “somewhat more restrictive” federal funds rate is needed. Her comments reinforced the view that US interest rates will stay elevated, which in turn keeps the dollar bid.
The FXS Fed Sentiment Index rose by 0.53 points to 150.49, firmly in hawkish territory. This backdrop has encouraged some profit-taking in gold ahead of the Trump-Xi summit, adding to the downward pressure.
Technical picture: neutral bias
From a technical perspective, XAU/USD is trading at $4,339.47. The metal sits between support from the 50-day and 100-day simple moving averages (SMAs) at $4,307.31 and $4,313.57, and resistance from the 21-day SMA at $4,388.96. The Relative Strength Index (RSI) at 48.18, just below the midline, reflects indecisive momentum after the recent pullback. The longer-term 200-day SMA at $4,542.04 suggests the market has lost some upside traction but has not turned decisively bearish.
On the downside, initial support lies at the cluster of SMAs around $4,313–4,307. A break below that could open the way toward the rising trend-line near $3,999.89. On the upside, a daily close above the 21-day SMA at $4,388.96 would be needed to reassert bullish momentum and potentially target the 200-day SMA at $4,542.04.
Key events to watch
All eyes are on the Trump-Xi meeting, which could drive broad risk sentiment, the dollar, and gold. Developments in the Middle East, further Fed commentary, and the US S&P Global preliminary business PMI data for September will also be closely watched. The manufacturing PMI is expected to ease to 53.5 from 53.9, while services PMI is forecast to tick down to 56 from 56.5. Weaker-than-expected readings could temper hawkish Fed expectations and provide a tailwind for gold.
Key takeaways
- Gold trades near $4,350, stuck in a familiar range as traders await the Trump-Xi summit.
- Falling oil prices and softer Treasury yields support gold, but a strong US dollar on hawkish Fed rhetoric caps gains.
- Technical levels show neutral momentum: support at $4,307–4,313 and resistance at $4,389.
- Key events include the Trump-Xi meeting, Middle East diplomacy, Fed speeches, and US PMI data.
Common questions
Why is gold stuck in a range?
Gold is being pulled in opposite directions. Lower oil prices and Treasury yields provide support, while a strong US dollar driven by hawkish Fed expectations limits upside. Traders are also reluctant to make big moves before the Trump-Xi meeting.
What is the significance of the Trump-Xi meeting for gold?
The meeting could influence risk sentiment, trade expectations, and the US dollar. A positive outcome might boost risk appetite and weigh on gold, while tensions could increase safe-haven demand.
What do the technical levels indicate?
The metal is trading between the 50/100-day SMAs (support) and the 21-day SMA (resistance). The RSI is near 50, showing indecision. A break above $4,389 could lead to a test of $4,542, while a drop below $4,307 may target $3,999.
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