Gold Hits US$4,003: Is a Rebound on the Horizon?

Global gold prices returned to the spotlight during Monday’s trading session (October 26, 2026), hovering around US$4,003 per troy ounce. This level suggests that gold is still struggling to recover following a decline of more than 4% the previous week—its sharpest weekly drop since June. Although the price is approaching the psychological US$4,000 mark, selling pressure has yet to fully subside. Market participants now face a critical question: has the decline in gold been deep enough to reignite buying interest, or does it signal the beginning of a more significant downturn?

Fundamentally, gold remains under pressure due to concerns over inflation in the United States, driven by high global oil prices. Ongoing conflict in the Middle East and the threat of energy supply disruptions have kept oil prices elevated, even as they undergo a minor correction. This environment risks sustaining inflationary pressure, prompting the Federal Reserve (The Fed) to remain cautious about easing monetary policy. The prospect of persistently high interest rates poses a challenge for gold; as a non-yielding asset, its appeal may diminish compared to interest-bearing investments.

Nevertheless, the possibility of a recovery for gold has not been entirely ruled out. A weakening US dollar and a decline in US Treasury yields over the last few sessions could provide room for gold prices to rebound. Furthermore, geopolitical uncertainty in the Middle East continues to support demand for safe-haven assets. In our view, the primary issue for gold is not a loss of its appeal as a hedge, but rather investor uncertainty regarding how long the Fed will maintain its restrictive policy stance. Consequently, any shift in interest rate expectations could serve as a key catalyst for a price reversal.

From a technical perspective, the US$4,000 level has become a critical battleground between buyers and sellers. If gold manages to hold above that level and breaks back through the US$4,028–US$4,050 resistance area, a recovery toward US$4,100 could be on the cards. Conversely, if the price falls back and remains below US$4,000, selling pressure could push gold to test support around US$3,975–US$3,970, and potentially down to US$3,940 should the weakness persist. Nevertheless, any breach of these technical levels requires confirmation through subsequent price action, as volatility leading up to the interest rate decision could trigger sudden, sharp swings in either direction.

Looking ahead, investors are primarily focused on the Federal Reserve meeting scheduled for October 27–28, followed by the release of U.S. economic growth figures and Personal Consumption Expenditures (PCE) inflation data. If the Fed signals that further interest rate hikes are necessary, gold risks coming under renewed pressure. On the other hand, if the central bank adopts a more dovish stance than the market anticipates, a decline in the dollar and bond yields could help fuel a recovery in gold. In our view, while gold remains in a vulnerable phase, the potential for a rebound persists. The key lies not merely in whether the price can hold above US$4,000, but in whether fundamental sentiment begins to provide investors with a compelling reason to return to the market.