Gold (XAU/USD) came under downward pressure during Asian trading on Monday, but there was no follow-through selling, with prices holding above last week's low. Rising optimism about global trade and increased investor risk appetite have dampened the safe-haven asset's impact.

At the same time, the mild inflation data in the United States in September consolidated the market's expectations that the Federal Reserve may cut interest rates twice more this year, limiting the rebound of the US dollar and also supporting gold prices to a certain extent.

The U.S. Treasury Secretary confirmed that the threat of 100% tariffs on imports from the Asian giant has been ruled out starting November 1. The news eased market concerns about trade escalation, while driving global equity assets higher and further weakening gold's safe-haven appeal.

However, investors remain optimistic about further rate cuts from the Federal Reserve, prompting short-term bears to exercise caution. Geopolitical risks continue to support gold. Russia's drone strike on the Ukrainian capital and the successful test of a new nuclear-powered cruise missile provided a tailwind for safe-haven demand.

Investors are generally remaining on the sidelines ahead of this week's Federal Reserve FOMC meeting, awaiting clarity on the US dollar's trajectory. Market research indicates that gold prices are facing short-term pressure primarily due to the intertwined impact of improved risk appetite and expectations of interest rate cuts, but geopolitical risks and the non-yielding nature of the asset provide support.

Analysts pointed out: "Gold is still buying near the $4,044 support in the short term. Investors remain cautious ahead of the Fed meeting while paying attention to global trade progress and geopolitical news."

Technical analysis shows that gold has fallen below the 23.6% Fibonacci retracement level of the sharp rise from July to October, but the price has found support around $4,044 and a technical rebound may still occur in the short term.

On the downside, focus on the 38.2% retracement level at approximately $3,948 and the 50% retracement level at $3,810–3,800. A further break below this could test the 50-day moving average at $3,775. Above, short-term resistance lies in the $4,109–4,110 range. A break above this could extend to $4,155–4,160 and $4,200, further challenging the $4,252–4,255 supply zone.

The overall short-term technical structure shows that the volatility is weak, but there are still rebound opportunities.

Editor's opinion:

Gold's short-term performance is influenced by global trade optimism, expectations of a Federal Reserve rate cut, and geopolitical risks. Investors remain cautious ahead of the FOMC meeting, with a focus on key technical levels at $4,044 and $4,109. Overall volatility is subdued, but geopolitical factors and its safe-haven nature continue to provide downward support.