Gold Price Analysis: Dollar Retreat and FOMC Minutes in Focus

Why Is Gold Struggling to Move Higher?

Gold is caught between two opposing forces. On one side, a weaker US dollar and falling expectations for an October rate hike are supporting the precious metal.

On the other, elevated Treasury yields, inflation concerns, and uncertainty around government debt are keeping pressure on gold.

This has left XAU/USD struggling to build enough momentum for a sustained move higher.

US Dollar Retreat Gives Gold Some Support

The US dollar has pulled back from its recent yearly highs, giving gold some breathing room.

As October 7, 2026, the US Dollar Index (DXY) was up slightly by 0.1% at 101.95, although the broader market mood suggests some profit-taking after the dollar's recent gains.

A weaker dollar generally supports gold because the metal becomes cheaper for buyers using other currencies. This has helped keep gold near $4,160.49 per ounce.

However, gold needs a more sustained decline in the dollar to gain stronger upside momentum.

October Rate Hike Bets Have Fallen

Expectations for another Federal Reserve rate hike in October have dropped significantly following weaker-than-expected US jobs data for September.

The probability of an October rate hike has fallen below 20%, compared with around 40% a week earlier. The CME FedWatch Tool currently shows a 19.4% probability of a rate increase this month.

Lower expectations for higher interest rates are generally positive for gold because the metal does not generate interest or yield.

However, falling rate-hike expectations alone have not been enough to trigger a strong gold rally. Frank Walbaum, fund manager at naga.com, said,

"Minutes will clarify the Fed's monetary policy and the degree of support ​among policymakers for further rate increases and could reshape upcoming hike odds. Subsequent moves in long-term Treasury yields, the dollar, or oil prices triggered by any Middle East developments would ​then amplify the directional impact (on gold)."

Treasury Yields Continue to Pressure Gold

One of the biggest challenges for gold remains elevated Treasury yields.

As of October 7, the 10-year US Treasury yield was around 5.27%, while the 2-year yield had moved lower toward 4.80%.

Higher yields can make interest-bearing assets more attractive compared with gold. They can also increase the opportunity cost of holding a non-yielding asset.

Inflation remains another concern, particularly with oil prices rising again. If higher energy prices add to inflation expectations, markets could continue pricing in tighter monetary policy, potentially keeping yields elevated.

Fawad Razaqzada, a market analyst at Forex.com, noted that gold could see a near-term decline before buyers return in a meaningful way, as the dollar remains strong and yields stay elevated.

Geopolitical Risks and Central Bank Demand

Geopolitical tensions are adding another layer of uncertainty to the gold market.

Growing tensions in the Middle East, including intensified attacks on tankers around the Strait of Hormuz, have contributed to a rebound in oil prices above $100 per barrel.

Higher oil prices can support gold through safe-haven demand, but they can also create inflationary pressure. That could keep interest rates and Treasury yields higher for longer, which would be negative for gold.

Meanwhile, central bank buying remains an important long-term support for the precious metal. Officials expect central banks to purchase an average of around 720 tonnes of gold annually through 2026.

Gold Market Outlook

Gold's technical setup remains cautious. A Bearish Belt Hold candlestick pattern has appeared around the $4,157.41 resistance area, suggesting that sellers remain active near higher levels.

The MACD is moving sideways in negative territory, indicating that bearish momentum has not fully disappeared. Meanwhile, the RSI is around 42, leaving room for further downside before reaching traditionally oversold conditions.

The VWAP and 20-period SMA are also above the current price, adding to the short-term bearish pressure.

Key Gold Price Levels

Resistance: $4,172 and $4,254.97

Support: $4,112 and $4,007.83

A sustained break above $4,172 could improve the short-term outlook and open the way toward the next resistance near $4,254.97.

On the downside, a decisive break below $4,112 could increase selling pressure and bring $4,007.83 into focus.

What Should Gold Traders Watch Now?

• US Dollar and Treasury Yields: A sustained decline in the dollar and a meaningful drop in longer-term yields could provide gold with stronger support.
• FOMC Meeting Minutes: The FOMC Meeting Minutes are the key event for gold today. Traders will look for clues about how Fed officials view inflation, employment, interest rates, and the possibility of further policy tightening.
• Oil Prices and Inflation: Oil prices are also important because another sustained rise could increase inflation expectations.

Warning: High-Impact Events Today!

The FOMC Meeting Minutes are scheduled for 2:00 PM ET today, Wednesday, October 7, 2026.

The minutes should provide more detail on the Federal Reserve's discussions during its previous meeting and could influence expectations for future interest-rate policy.

A hawkish tone could push the dollar and yields higher, creating additional pressure on gold. A more dovish message could have the opposite effect and support XAU/USD.

Traders should also watch US Consumer Credit data for August, scheduled for 3:00 PM ET. The market expects consumer credit to rise by $15.20 billion, compared with the previous reading of $18.10 billion.

With the Fed minutes and US economic data arriving close together, volatility in the dollar, Treasury yields, and gold could increase.

Market conditions can change quickly around high-impact economic events. Traders should confirm current prices, yields, economic data, and technical levels before making trading decisions.