Gold remains under pressure below $3,900 as US PPI data loom

• Expectations of aggressive Fed interest rate rises dampen sentiment, putting Gold on course for a steep weekly loss.
• The forthcoming US PPI release is in focus as traders seek further indications of inflation trends and the Fed’s interest rate path.
• With RSI under 50 and MACD below zero, technical signals continue to point to a bearish outlook.

Thursday’s fall to $3,852 took Gold (XAU/USD) to its lowest since October 2025. On Friday, the metal is giving back some gains after a brief move above $3,900. Hawkish comments by Federal Reserve (Fed) officials have strengthened expectations that monetary tightening will persist, pushing the US Dollar (USD) and US Treasury yields higher. Gold has consequently lost more than 4% so far this week.

US Producer Price Index (PPI) figures, due at 13:30 GMT, are now the main focus. At the time of writing, XAU/USD trades near $3,889, a gain of 0.40% on the day.

Dollar rallies as Fed rate rise bets lift short-dated yields

Rapid changes in market pricing for the Fed’s near-term policy path have produced what ING analysts call “a powerful, macro-driven rally in the dollar” this week. As they point out, “short-dated US yields are close to 40bp higher since Tuesday morning, when the Fed's Christopher Waller mused over the need for a 50bp hike in December.” Following those remarks, ING observes that “the market has since adopted the view that back-to-back December and January hikes look likely, while extending the full Fed adjustment from here to a full 85bp of tightening.”

Near a 19-month high at around 103.23, the US Dollar Index (DXY) is heading for its third consecutive weekly advance. The index measures the dollar against a basket of six major currencies. Dollar strength increases the cost of Gold for buyers paying in other currencies; rising US Treasury yields, meanwhile, increase the opportunity cost of owning the metal, which pays no yield.

Fed officials signal further action as inflation stays too high

October’s headline US Consumer Price Index (CPI) increased by 0.4% MoM, surpassing the 0.3% forecast, according to figures released earlier this week. Excluding food and energy, core CPI climbed 0.3% MoM against expectations of 0.2%.

To bring inflation down, the central bank needs “at least two more 25-basis-point rate increases”, Dallas Fed President Lorie Logan said on Tuesday.

Describing inflation pressures as “moving in the wrong direction” on Thursday, Cleveland Fed President Beth Hammack said the Fed needed to “move to a restrictive stance of policy” to return inflation to 2%. San Francisco Fed President Mary Daly expressed a similar view, saying her “bias is that further tightening will be needed.”

With little prospect of an agreement to end the US-Iran war, elevated energy costs could sustain inflation. On Thursday, West Texas Intermediate (WTI) crude rose more than 3% after US President Donald Trump said Washington did not need an agreement with Iran to bring the war to an end.

Technical Analysis: Gold remains under pressure beneath key daily SMAs

Trading below its 21-day, 50-day, and 100-day Simple Moving Averages (SMAs), XAU/USD retains a bearish near-term outlook on the daily chart. A Relative Strength Index (RSI) reading of 38 places it beneath the midpoint, while the Moving Average Convergence Divergence (MACD) indicator remains below zero. Together, these signals suggest a modest downward bias, although oversold conditions have yet to become extreme.

The first upside hurdle is the nearby horizontal resistance at $3,900, with the psychological $4,000 mark next. Beyond that, the 21-day SMA at $4,031 limits a more substantial rebound. Further up, a wider supply zone is formed by the 50-day SMA at $4,154 and the 100-day SMA at $4,197.

Immediate downside support lies at Thursday’s $3,852 low, ahead of the psychological $3,800 mark. Should $3,800 give way, a more pronounced fall could follow.

(The technical analysis of this story was written with the help of an AI tool. Know more.)