Gold Struggles to Rally Again as US$4,100 Level Comes into Focus
Gold prices edged higher after falling for three consecutive sessions.
The rise was supported by a decline in US Treasury yields, while investors awaited next week’s Federal Reserve meeting.
According to Refinitiv, gold closed at US$4,140.38 per troy ounce on Wednesday (21 October 2026), up 0.39%.
The gain offered some relief after prices had fallen for three days in a row.
Gold prices declined again on Thursday. At 6.27am Western Indonesian Time, the metal was down 0.34% at US$4,126.46 per troy ounce.
The yield on the benchmark 10-year US Treasury bond fell for a second consecutive session. This reduced the opportunity cost of holding gold, which pays no interest.
Investors are now watching the Federal Reserve’s policy meeting on 27–28 October and next week’s US Personal Consumption Expenditures (PCE) price index report for clues about the future direction of interest rates.
“I think the market is currently pricing in one 25-basis-point rate rise this year, but it may not happen until December. The likelihood of a rate rise in October has fallen quite significantly,” Peter Grant, vice-president and senior metals strategist at Zaner Metals, said, according to Refinitiv.
“I think gold prices will move within a limited range for the time being. However, the bias is still to the downside,” he said.
According to the CME FedWatch Tool, markets see an 88% probability that the Federal Reserve will raise interest rates in December.
Nearly all economists surveyed by Reuters expect the Federal Reserve to hold rates this month and raise them in December.
Policymakers are choosing to proceed cautiously despite persistent inflation, which under normal circumstances could prompt tighter monetary policy.
Although gold is traditionally considered a hedge against inflation, higher interest rates reduce its appeal because investors tend to favour assets that generate returns.
“I still believe gold is in a consolidation phase in the short term. So whenever prices fall below US$4,100, they tend to find a floor as buying interest emerges. But the potential for gains remains limited while the conflict in the Middle East remains a concern,” said Giovanni Staunovo, an analyst at UBS.
Meanwhile, oil prices were relatively steady as investors considered the possibility of progress towards Russia–Ukraine negotiations, alongside falling US oil inventories and the lack of dialogue between the US and Iran.