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Gold: Fed minutes, inflation, and 3 scenarios
Economy
Gold futures are trading at $4,159.4 (+0.62%) at the time of writing. Over the past week, gold has gained 0.58%; over the past month, it has lost 6.10%; and year-to-date, it is down 4.39%.
The 52-week trading range is $3,913.7–$5,586.2. The market is awaiting the Fed minutes and inflation data following a weak US employment report.
What is currently driving gold?
Weak employment and interest rates. In September, 29,000 jobs were created in the US, compared to a forecast of 89,000. Following the report, traders sharply reduced their bets on a Fed rate hike in October: according to Yahoo Finance, they estimate the probability at 16%, down from 64% a week earlier.
Fed minutes. On October 7 (21:00 Moscow time), the Fed will release the minutes from its September 15–16 meeting, which resulted in a 25-basis-point rate hike to a range of 3.75–4.00%. While the decision is already known, the minutes will reveal the extent of disagreement among committee members. In the minutes from the July meeting, "several participants" advocated for a 25-basis-point hike, and three committee members voted against maintaining the rate.
Inflation and the Fed meeting. September inflation data (CPI) will be released on October 14, and the next Fed meeting is scheduled for October 27–28. Brent crude remains above $100, and high oil prices are sustaining inflationary pressure.
How gold reacts to the Fed. In June, the metal fell in price by approximately 12%, marking the sharpest monthly decline since October 2008. The drivers behind this drop were the Federal Reserve's hawkish stance (at the June 17 meeting, the median interest rate forecast for 2026 rose to 3.8% from 3.4%, with nine of the 18 participants anticipating at least one hike), a US-Iran truce, and a strong dollar.
Technical outlook (daily chart)
The trend is bearish but weak, with an ADX of 21.4. The price is trading below all key moving averages except the SMA5. The MACD (-60.3) is below the signal line, the RSI stands at 37.2, and the directional movement indicator shows a bearish bias (-DI 43.3 vs. +DI 25.7). However, the Stochastic (19.8) and Williams %R (-84) indicators are in oversold territory, suggesting the possibility of a technical rebound. The Average True Range (ATR) is approximately $54.
Resistance levels are located at $4,205–$4,208 (EMA10 and SMA10), followed by $4,262–$4,283 (EMA20 and SMA20) and $4,300–$4,332 (EMA50 and SMA50).
Support levels: around $4,156 (SMA5, current zone), followed by approximately $4,105 and the 52-week low of $3,913.7. The $4,105 level is a calculated figure: the current price minus the average daily range. Three scenarios for the coming days
The minutes pertain to a meeting held prior to the weak employment report; consequently, the market reaction may be muted, and the inflation data due on October 14 could prove more significant.
* Bullish scenario. The minutes reveal that many participants are willing to hold off on another rate hike. Bond yields and the dollar could decline, while gold might break above $4,208 and test the $4,262–$4,283 zone. Oversold conditions support this scenario.
* Base-case scenario. No surprises: the market remains mindful of the weak employment data and awaits the CPI release. Gold is likely to fluctuate between $4,105 and $4,208.
* Bearish scenario. The minutes show strong support for further rate hikes and express concern regarding oil-driven inflation. The dollar could strengthen, putting the $4,105 level at risk. There is little significant support below that point until the $4,000 mark, followed by $3,914.
Bottom line
Following the weak employment report, the balance of risks has shifted slightly in gold's favor. However, the trend remains bearish: as long as the price stays below $4,208, any rally is likely a rebound rather than a reversal. The key focus for this week is the October 7 minutes release, though the inflation data on October 14 is equally important.