Gold (XAU/USD) is edging higher to around $4,140 during Friday's early Asian session, rebounding from a two-month low. The lift didn't come from the Federal Reserve. It came from President Donald Trump, who said the US won't attack Iran before the midterm elections. That helped cool oil prices and the inflation fears that had been pushing Gold lower. Gold still carries a negative weekly streak, though, and the Fed's message hasn't softened.
The Iran headline that took some pressure off
Trump said Washington was having "productive discussions" with Iran, without offering details, and that the US won't strike before the midterms. His remarks followed a recent report that the White House was considering a strike on Iran ahead of the November vote. Lower energy prices matter for Gold because oil-driven inflation fears have been feeding the rate-hike bets and the Treasury yields that weigh on the metal. An overnight decline in US bond yields also kept the US Dollar below an 18-month high, giving the non-yielding metal room to recover.
The Fed hasn't changed its tune
The minutes from the Fed's September meeting showed policymakers united in backing the hike. They also stated that "most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end." That is the reason Gold's bounce looks fragile.
Fed Governor Christopher Waller added on Thursday that further rate hikes would likely be needed, but said there was "flexibility" about the pace and left the door open for a pause in October. That has already moved pricing. According to the CME FedWatch tool, traders now see a 17.7% probability of an October hike, but an 81.3% chance of a December increase. Higher interest rates and Treasury yields typically weigh on Gold because they raise the opportunity cost of holding an asset that pays no interest.
Waller's speech scored 8 out of 10 on the FXS Speechtracker, well above the 7.2 historical average. He pointed to persistent inflation drivers such as the AI buildout and energy shocks, a strengthening economy, and a "solid and stable" labor market, and noted inflation running close to 5-1/2 years above target. He also advocated using signaling rather than rigid forward guidance. The FXS Fed Sentiment Index rose 0.42 points to 138.34, which keeps it deep in hawkish territory, well above the neutral 100 mark.
Gold lags while copper holds its record
Scotiabank describes a split across metals. Copper remains range-bound at its record high, while Gold continues to look vulnerable after Wednesday's break to a fresh local low under $4,100 an ounce, the lowest since early August. The bank says the move leaves Gold particularly exposed. That contrast matters: this isn't a broad metals sell-off. It's specific to Gold's sensitivity to yields and the Fed.
What the charts are showing
On the daily chart, XAU/USD holds below the Bollinger middle band and the 100-day simple moving average, so the near-term bias stays bearish despite the recovery from recent lows. The Relative Strength Index at 39.99 sits below neutral, which suggests sellers still hold the upper hand even though conditions aren't oversold.
Immediate support is at the lower Bollinger band near $4,060, and a firmer bounce from there would be needed to ease the pressure. Resistance starts at the Bollinger middle band around $4,240, followed by the 100-day average at $4,265, with the upper Bollinger band at $4,420 as the stronger barrier if buyers attempt a deeper recovery.
What this means for Gold
Gold's bounce is a relief rally built on a political headline, not a change in the monetary backdrop. With most Fed officials still seeing another hike by year-end and December odds above 80%, rallies need either softer data or lower long-end yields to hold. If Trump's pledge keeps oil subdued, Gold has room to recover toward resistance. If oil jumps again, the pressure on Gold will come back quickly.
What traders should prepare for
Friday's preliminary University of Michigan Consumer Sentiment reading
Further Fed commentary after the minutes and Waller's remarks, especially on whether October is a pause
Oil prices and any change in Trump's Iran messaging, which drive the inflation story for Gold
US Treasury yields, which reached a 24-year high this week
Gold's key levels: support near $4,060, resistance at $4,240, $4,265, and $4,420
Bottom line: Gold rebounded because the White House calmed oil, not because the Fed turned dovish, and the minutes say the Fed isn't done.