Gold Weakens as Interest Rates Take Center Stage

Gold prices edged lower in Wednesday’s (Oct 28) trading session, following gains over the previous two consecutive sessions. XAU/USD is currently trading below US$4,050 per troy ounce, with investors adopting a cautious stance ahead of the U.S. Federal Reserve’s policy decision. While the Fed is expected to keep interest rates unchanged, the market will be closely watching for any signals regarding a potential rate hike in December.

Meanwhile, investors are also monitoring the results of Israel’s general election, which could influence the trajectory of the conflict in the Middle East. Regional tensions and high energy prices continue to fuel inflation risks, sustaining expectations for a tight monetary policy. These conditions limit the upside potential for gold, as higher interest rates tend to diminish the appeal of a non-yielding asset like the precious metal.

Gold price at the time of this analysis: $4,047

- Buy if the price moves to $4,052

- Sell if the price moves to $4,042

Resistance 2: $4,066

Resistance 1: $4,059

Support 1: $4,035

Support 2: $4,028

Note: This article is analytical in nature and does not constitute definitive advice. Please consider the impact of fundamental and technical developments on trading before making any investment decisions.