28.09.202612:09 Forex Analysis & Reviews: XAU/USD – Price Analysis and Forecast: Gold Prices Continue to Decline

On Monday, gold (XAU/USD) continued to post significant losses, updating its September low and falling to levels last seen on August 5, reaching around $4,152 amid a negative fundamental backdrop. After the US Federal Reserve demonstrated a hawkish stance at the beginning of the month, growing concerns about inflation caused by higher oil prices are keeping US Treasury yields at multi-year highs. This, in turn, is considered the main factor prompting capital outflows from gold.

In mid-September 2026, the Federal Reserve raised its benchmark interest rate for the first time in three years and hinted at the possibility of another rate hike before the end of the current year. Moreover, Fed officials are inclined toward tighter monetary policy given the inflation risks associated with rising energy prices. According to CME Group's FedWatch tool, traders currently estimate the probability of a Federal Reserve rate hike in October at around 68%.

OCBC strategists note that "resilient US economic data, high energy prices, and persistent inflation concerns continue to push Treasury yields higher," supporting the US dollar and putting pressure on assets sensitive to changes in interest rates. They also point to the Fed's hawkish rhetoric, citing statements from New York Fed President John Williams and Cleveland Fed President Beth Hammack, who "warned that the risks of accelerating inflation remain." Philadelphia Fed President Patrick Harker noted that further moderate policy tightening may be required if inflation does not slow. This is reflected in current market pricing, which "implies around a 70% probability that rates will be raised by another 25 basis points in October," indicating growing market confidence that the Fed's fight against inflation is not yet over.

In addition, geopolitical uncertainty is supporting the US dollar and placing further pressure on commodity assets. In the context of recent developments surrounding the Middle East crisis, US President Donald Trump rejected Iran's proposal on Saturday to reopen the Strait of Hormuz and cease hostilities provided that its demands were met. On Sunday, Trump added that additional military strikes against Iran could occur before the US midterm elections.

Meanwhile, the Houthis continued to attack Saudi Arabia, while Yemeni government forces intensified their offensive against the Iran-backed group, conducting a series of air and ground operations. This is increasing concerns about a large-scale regional conflict and prompting traders to factor a geopolitical risk premium into prices. This factor is supporting oil prices and strengthening the US dollar as a safe-haven asset, creating conditions for further declines in gold prices.

For better trading opportunities, attention should be paid to speeches by members of the Federal Open Market Committee (FOMC). Their statements, together with incoming geopolitical news, will determine the dynamics of the US dollar and XAU/USD. This week, market participants will also assess the US Personal Consumption Expenditures (PCE) Price Index and the final estimate of second-quarter GDP, both of which will be released on Wednesday. In addition, the key US labor market report, Nonfarm Payrolls (NFP), will be released on Friday. The report could influence expectations for Federal Reserve rate hikes and provide the market with fresh momentum.

From a technical perspective, the oscillators are in negative territory, confirming the advantage of sellers in the market. If the decline continues, the pair is likely to find support at the round level of $4,100. Important moving averages will continue to act as resistance. The nearest of these is the 200-day EMA.