Gold prices (XAU/USD) ended last week higher as softer inflation expectations and steady yields lifted sentiment. The University of Michigan’s consumer sentiment index came in at 55.0 vs. 54.1 expected, showing improving household confidence. Meanwhile, 1-year inflation expectations eased to 4.6%, offering some relief for the Federal Reserve.
However, market conviction remains cautious. The FOMC minutes revealed that several Fed officials still see inflation risks on the upside. While investors lean dovish, Chair Powell’s remarks underlined that rate cuts are not imminent, keeping markets on edge.
The US Dollar Index (DXY) hovered near 99.2, and Treasury yields retreated from recent highs — helping gold rebound from midweek lows to reclaim the $4,000 level. Mild safe-haven demand also supported the metal ahead of this week’s inflation data.
Key Events to Watch This Week
This week is stacked with major catalysts that could drive volatility in gold and USD pairs:
- Powell Speaks Twice (Oct 14 & later in week) – Any guidance on the Fed’s rate path could shift momentum in commodities and currencies.
- Empire State Manufacturing Index (Oct 15) – Expected at 0.2 vs -8.7 prior, possibly showing improved regional output.
- Philly Fed Index (Oct 16) – Forecast 9.1 vs 23.2, testing U.S. growth resilience.
- Core PPI & Retail Sales (Oct 16) – Key readings on inflation and consumer demand.
- Unemployment Claims – A surprise rise could strengthen rate-cut bets for Q4.
These releases will shape whether the Fed maintains its “higher for longer” stance or starts signaling a pivot as economic data cools.
XAU/USD Technical Outlook
Gold remains within a strong ascending channel, rebounding from the $3,965 (0.382 Fibonacci) level and showing higher lows on the 4-hour chart — a sign of sustained bullish control.
A bullish engulfing candle at $3,975 suggests renewed buying interest, with RSI at 57 showing a hidden bullish divergence — a potential setup for another leg higher.
- Upside targets: $4,057, $4,093, and $4,133 (channel top)
- Support levels: $3,910 and $3,871 (0.786 Fibonacci)
For traders, a break above $4,020 signals a continuation higher, with stops ideally below $3,938 to manage risk.
Volatility may increase with Powell’s speeches and key inflation data — but the broader trend for gold remains bullish.