Gold prices edged higher in Asian trading on Tuesday, reversing an initial decline amid a complex market backdrop shaped by renewed geopolitical risks and the expectation of at least one more US interest-rate hike before the end of the year.
Price movement and key drivers
Spot gold rose 0.1% to $4,145.22 an ounce by 0347 GMT after dipping earlier in the session. December US gold futures also gained 0.1% to $4,164.70.
A weaker US dollar helped gold recover from earlier losses, though prices continued to struggle below $4,200 per ounce—a level that has limited recent rallies.
Investors are currently weighing a widely anticipated pause in Federal Reserve rate hikes at the October meeting against the increased likelihood of additional monetary tightening in December. The Federal Reserve last raised its benchmark rate to 3.75%–4% in September.
September’s annual consumer inflation rate came in at 3.7%, reinforcing the cautious stance, while the forthcoming personal consumption expenditures report, the Fed’s preferred measure of inflation, is scheduled for release on October 29, just after the next rate decision.
Traders see about an 82% probability that the Fed will hold rates steady in October, but futures pricing points to an 89% chance of a rate increase in December.
Analysts at ANZ Research highlighted elevated bond yields and reduced market liquidity due to continuing uncertainty over the interest-rate outlook. They mentioned that yields are also being pushed by selling in French government bonds following recent unrest in France.
Geopolitics and gold’s safe-haven appeal
Recent turmoil in the Middle East, including new attacks by Yemen’s Houthi movement that targeted Saudi energy, airport, and military facilities, has traditionally driven demand for gold as a haven asset. At the same time, Brent crude traded close to $110 a barrel.
However, the strong oil rally also presents potential drawbacks for bullion. Higher fuel costs may prolong elevated inflation, leading the US Federal Reserve to maintain tight monetary policy and sustain upward pressure on Treasury yields—factors that could outweigh increased safe-haven demand for gold.
Some market analysts described a divide between short-term sellers reacting to macroeconomic trends and investors seeking gold as protection amid global uncertainty.
Mini dictionary: Houthi movement, a political and armed group based in Yemen, involved in regional conflicts and implicated in attacks on energy infrastructure in the Gulf.
ETF demand and resistance at $4,200
World Gold Council data revealed that global gold-backed exchange-traded funds attracted $10 billion in September and a record $31 billion in the third quarter. Despite this surge in ETF inflows, gold prices dropped 8.5% over September, and holdings reached an all-time high of 4,256 tonnes.
World Gold Council analyst Johan Palmberg cited the rise in Treasury yields, a stronger US dollar, and futures-position reductions as key contributors to gold’s price weakness in September, even as strategic ETF investors continued to accumulate bullion.
The strong demand for gold ETFs signaled long-term institutional interest, even as day-to-day price action remained subdued. The near-term outlook hinges on whether recent declines in the dollar and bond yields can help sustain a move above the $4,200 resistance level.
| Metric | September 2026 | Q3 2026 | Gold Price |
|---|---|---|---|
| Gold ETF Inflows | $10 billion | $31 billion (record) | -8.5% (Sep drop) |
| ETF Holdings | 4,256 tonnes (record) | – | – |
