Spot gold falls to $4,122.37, with one-hour moving averages overhead





In early Asian trading on October 20, spot gold stood at $4,122.37, down $18.38 or 0.44% from the previous close. It opened at $4,142.07, reached an intraday high of $4,144.04 and a low of $4,121.76, compared with the previous close of $4,140.75. Price was approaching the session low as early selling pressure continued.

On the one-hour chart, MA1 was $4,132.62, MA20 was $4,137.92 and MA30 was $4,152.59. Price traded below all three moving averages, while MA1 and MA20 were also below MA30, indicating a weak short-term moving-average structure. Both the previous close and the session open were above the current price. After retreating from the opening level, gold continued trading near its intraday lows.





RSI(14) was 24.49, within oversold territory below 30. The low RSI reading and price remaining capped by moving averages both reflected substantial recent downward pressure. Attention centred on support at lower levels versus overhead moving-average resistance, with sellers retaining the short-term initiative.

Reuters reported that gold fell on October 19 as the dollar and US 10-year Treasury yield recovered together. Despite continuing regional tensions, gold remained under pressure from both higher yields and a stronger dollar.

A stronger dollar and elevated yields maintain pressure on gold





On October 19, the dollar strengthened and US Treasury yields remained elevated. Reuters’ market roundup showed the US 10-year Treasury yield recovering to 5.14%. An earlier sell-off in artificial-intelligence-related stocks had driven safe-haven flows into Treasuries. As those shares rebounded, the earlier demand for safety cooled and yields rose.

Forex.com market analyst Fawad Razaqzada told Reuters that concerns about central banks needing to tighten policy further to control inflation were providing fresh support for yields. With yields remaining high, gold investors were reconsidering whether holding bonds might be more attractive.

Looking ahead to the Federal Reserve’s next move, Razaqzada focused on policy guidance. He said the tone of the statement would affect gold whether the Fed raised rates next week or waited until December; hawkish messaging could weaken gold further in the short term. As the policy meeting approached, expectations about how long rates would remain high continued to shape gold trading.

Hormuz shipping risks persist as transport costs remain high





Merchant-shipping security in the Strait of Hormuz remained in focus. In an October 14 report, Reuters cited two senior Iranian officials as saying Iran was adjusting its strategy towards passing vessels to maintain pressure on energy markets ahead of the US midterm elections. The officials said the changes involved attack methods and frequency, with the aim of obstructing efforts by the United States and its allies to lower energy commodity prices.

The same report cited maritime security information indicating at least five incidents involving merchant vessels around Hormuz during the preceding 48-hour period covered by its figures, including drone attacks. Iranian officials also said operations would extend into the Gulf of Oman and waters farther afield. Maritime security risks therefore affected passage through shipping lanes, transport arrangements and insurance costs.

Reuters noted that persistent attack threats and high transport and insurance costs were hindering a return to normal traffic through the strait. US military officials interviewed said energy exports through the strait had increased, while the United States maintained its naval blockade of Iranian ports. The confrontation over maritime routes continued to affect regional security and energy markets.

Gold nevertheless continued falling despite persistent geopolitical risks, with dollar strength and Treasury yields still dominating recent price action. Concerns about shipping security coexisted with fears of tighter central-bank policy, testing gold’s safe-haven appeal in a high-rate environment.

Fed guidance and PCE data become the next focus





The Federal Reserve raised rates by 25 basis points in September, its first increase of the year. According to CME FedWatch data cited by Reuters in its October 19 report, traders priced an 82.8% probability of unchanged rates in October and a 90% probability of a December hike. Expectations for a pause this month and further tightening at year-end coexisted, keeping high rates central to market pricing.

At next week’s meeting, investors will focus on the Fed’s assessment of inflation risks and guidance on the subsequent rate path. Razaqzada’s comments about hawkish wording also highlighted the statement and policy communication as being as important as the rate decision. Gold was absorbing pressure from both yields that had already risen and expectations of further tightening.

PCE data will also draw attention next week. Reuters noted that it is the Fed’s preferred inflation gauge and that the figures would provide an important reference for investors assessing future policy. Markets awaited inflation readings and central-bank comments for fresh clues to December rate expectations.

Ahead of the policy meeting and inflation data, gold remained caught between a recovering dollar, elevated Treasury yields and regional tensions. The next news catalysts will centre on the Fed’s policy tone, PCE data and shipping security in Hormuz. Whether high-rate pressure can ease remains the key question for gold.

(Lucky Gold Global Limited Editorial)