I. Gold Weakens After Bouncing Off Lows, Overhead Pressure Intact



On Wednesday, gold rebounded from a near one-week low, but surrendered its gains during Thursday's Asian trading session as market sentiment rotated continuously around the Federal Reserve's monetary policy path.

Lucky Gold Global Limited London gold recently traded at $4,115.91 per ounce, down $24.74 or 0.60% from the previous print.

The current hourly candle opened at $4,136.95, recording a high of $4,146.11 against an intraday low of $4,110.80.

Across the moving average matrix, MA1 stands at $4,125.27, MA20 at $4,127.42, and MA30 at $4,126.13, with price trading below all three lines; RSI(14) registers at 44.41 within neutral-to-weak territory.

A Reuters metals report on October 21 noted that spot gold rebounded from one-week lows on Wednesday as falling Treasury yields provided respite, while traders cast their sights toward the October 27–28 FOMC meeting and subsequent core PCE data.

However, price action softened again during Asian trade, with the 1-hour chart showing quotes pinned beneath both previous closes and short-term averages as dip-buying momentum failed to sustain an extended push.

II. Yield Pullback Offers Brief Respite, Yet Bond Supply Stirs Volatility

The benchmark 10-year US Treasury yield declined 0.6 basis points on Wednesday to 5.111%.

Reuters global market coverage recorded the move, noting that Treasury yields recently retreated from cycle highs as concerns surrounding financing costs for artificial intelligence capital expenditures prompted capital to re-enter sovereign debt.

The minor retreat in yields offered bullion short-term breathing room, inviting opportunistic buyers into the physical market on Wednesday.

Yet support from bond markets has proven uneven. A 20-year Treasury bond auction yielded mixed reception, and the US Department of the Treasury followed with scheduled 5-year Treasury Inflation-Protected Securities (TIPS) issuance.

With the yield curve and inflation expectations undergoing real-time recalibration, Wednesday's yield pullback failed to generate sustainable follow-through demand for bullion.

III. October Pause Priced In, December Rate Hike Expectations Cap Rebound Ceiling



Market focus remains squarely anchored on the October 27–28 FOMC meeting and the subsequent release of the US Personal Consumption Expenditures (PCE) price index.

A comprehensive Reuters survey revealed that all 100 polled economists expect the Federal Reserve to implement a rate hike in December, while 94 respondents anticipate benchmark rates will remain steady at 3.75%–4.00% in October.

The poll clearly demarcates near-term inaction from year-end policy tightening.

Survey analysis highlighted that while long-term yields have retreated from their early-October peaks, markets are aggressively recalibrating the timing of the next rate hike.

Citing the CME FedWatch tool, Reuters noted that the probability of a December rate hike stands at approximately 88%; an October pause provides merely a tactical cushion, whereas looming year-end tightening continues to curtail bullion's upside.

IV. US Dollar Hovers Near Lows as Capital Rotates Across Gold, Treasuries, and Equities

On Wednesday, the US Dollar Index eased 0.14% to 101.65, with the euro changing hands at $1.1237, while the Nasdaq Composite gained over 1% as Wall Street closed higher.

While a softer dollar typically creates upside breathing room for gold, bullion's gains remained constrained by complex multi-asset capital rotations.

Bill Northey, Senior Investment Director at U.S. Bank Wealth Management, observed that investors are pivoting rapidly between risk and safe-haven assets, with funds moving into Treasuries during equity pullbacks and retreating from bonds when stocks surge.

Simultaneously, AI-linked equities continue to absorb substantial capital. During Wednesday's equity advance, the Nasdaq climbed over 1%, SpaceX shares rallied approximately 7%, and Advanced Micro Devices (AMD) delivered quarterly revenue and margin guidance that surpassed consensus forecasts.

Strengthening risk appetite dampened gold's safe-haven appeal, while a 10-year Treasury yield hovering near 5.1% provides institutional allocators with an attractive non-zero yield alternative.

CIBC Capital Markets strategist Noah Buffam noted that the AI trade exerts a tangible impact on US growth and inflation trajectories; Scotiabank strategist Shaun Osborne added that the broader market lacks a single dominating theme ahead of the FOMC meeting.

V. Geopolitical Sanctions and Trilateral Talks Deliver Impulses Without Shifting Macro Anchor

On the geopolitical front, the US Treasury Department announced fresh sanctions on October 21 against individuals, maritime shipping entities, and vessels facilitating the illicit transport of Iranian commodities, issuing two accompanying general licenses.

The US diplomatic mission in Saudi Arabia released a concurrent security advisory warning of ongoing Houthi strikes targeting civil aviation and critical infrastructure.

Meanwhile, market headlines digested Israeli military exercises, tensions along the Iranian border, and preliminary arrangements for trilateral talks between Russia, the US, and Ukraine.

While these developments produce intermittent spikes in safe-haven demand, the associated volatility in energy benchmarks and inflation expectations ultimately reinforces the Federal Reserve's restrictive policy stance.

Russia expressed willingness to resume trilateral discussions in November, and Ukrainian officials supported convening fresh rounds promptly; diplomatic timelines remain a fluid market variable.

VI. Near-Term Focus Reverts to PCE and FOMC, Watching Moving Average Consolidations

Presently, bullion is supported by falling yields, a softer dollar, and geopolitical risks, while being capped by December rate hike pricing, Treasury supply dynamics, and capital rotation toward risk assets.

Technically, London gold trades at $4,115.91 beneath MA1, MA20, and MA30, with $4,110.80 serving as the verified session support floor, while RSI(14) at 44.41 signals an absence of decisive directional momentum.

Subsequent price action is anticipated to rotate closely around the dense hourly moving average band.

Going forward, markets await core PCE data and official FOMC forward guidance to clarify the December policy trajectory.

Interest rate expectations remain the core fundamental anchor for gold valuation, while geopolitical developments generate temporary headline impulses; any sustained bullion rebound will require alignment across both drivers.

(Compiled and Edited by Lucky Gold Global Limited)