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Gold Rebounds Above $4,000 as US Dollar Holds Near Two-Week High Ahead of Fed Decision

Published: 28 October 2026,05:06

Daily Market Analysis New

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Key Takeaways:

*The Dollar Index hovered near a two-week high of 102.40 as investors remained cautious ahead of the Federal Reserve’s monetary policy decision.

*Markets priced approximately a 91% probability of unchanged interest rates in October despite persistent US inflation concerns.

*Upcoming Fed, ECB and BoJ decisions could provide fresh signals on the global monetary policy outlook.

Market Summary:

The U.S. Dollar Index continued to hover near a two-week high of 102.40 as investors adopted a cautious approach ahead of the Federal Reserve’s October 27–28 monetary policy meeting. Despite stronger-than-expected US Consumer Price Index (CPI) and Producer Price Index (PPI) reports earlier this month, markets currently assign approximately a 91% probability that the Fed will maintain interest rates unchanged. However, persistent inflation concerns have kept expectations of additional monetary tightening later this year alive, providing underlying support for the greenback.

Meanwhile, global financial markets are preparing for a series of major central bank decisions, including those from the European Central Bank (ECB), Bank of Japan (BoJ) and Bank of Canada (BoC). Investors are particularly focused on whether policymakers will signal further interest rate increases as elevated energy prices continue to fuel inflationary pressures. Attention will also turn to Thursday’s US third-quarter GDP and September Core Personal Consumption Expenditures (PCE) inflation data, which could provide clearer insights into economic growth and the Federal Reserve’s future policy direction.

On the other hand, gold prices rebounded above the psychological $4,000 level, recovering from recent lows as bargain-hunting emerged following the precious metal’s aggressive selloff. Softer crude oil prices also helped ease immediate inflation concerns, providing some relief to non-yielding bullion. However, the broader outlook remains cautious as expectations of further monetary tightening by major central banks continue to limit gold’s upside potential.

Despite expectations that most major central banks will maintain interest rates unchanged at their upcoming meetings, persistent inflationary pressures could encourage policymakers to retain a hawkish stance. The possibility of additional rate hikes later this year continues to create uncertainty for gold, particularly as higher interest rates increase the opportunity cost of holding non-yielding assets.

Looking ahead, the Federal Reserve’s policy decision and upcoming US economic data will remain crucial catalysts for both gold and the dollar. Hawkish Fed commentary or stronger-than-expected inflation could reinforce dollar strength and pressure gold prices. Conversely, softer economic data and less hawkish monetary policy signals could weaken the greenback and support a more sustained recovery in gold. Until clearer signals emerge, both assets could remain volatile as investors reassess the global interest rate outlook.

Technical Analysis

GOLD, H4

Gold prices are trading higher after rebounding from the 3,975.00 support level, currently testing the 4,080.00 resistance level, which acts as a key near-term breakout zone.

Market attention remains focused on a potential breakout above 4,080.00. A confirmed break could extend gains toward the next resistance level at 4,195.00, reinforcing the bullish short-term structure.

However, momentum indicators suggest that buying pressure may be weakening. The MACD is showing diminishing bullish momentum, while the RSI at 50 has retreated toward the midline, indicating a loss of upward momentum and an increasing possibility of a short-term technical correction.

If bullish momentum fails to persist, gold may experience a technical retracement and retest the 3,975.00 support level, followed by 3,865.00 if selling pressure intensifies.

Resistance Levels: 4080.00, 4195.00
Support Levels: 3975.00, 3865.00

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