Gold drifts lower as Fed decision looms, despite softer dollar and falling Treasury yields

by VT Markets
/
Oct 21, 2026

Gold eased on Tuesday, with XAU/USD at $4,122, down 0.43%, drifting away from $4,150 even as US Treasury yields fell and the US Dollar softened. With a thin US data calendar, attention has turned to the Federal Reserve meeting next week after officials entered a blackout period ahead of a press conference on October 28. Money markets have priced a 14% chance of an October rate rise, while the implied probability for December is near 90%. US Pending Home Sales slid 7.3% in September, and Initial Jobless Claims are seen edging up to 200K from 199K, alongside S&P Global Flash PMIs and the final University of Michigan consumer sentiment reading for October.

Global Central Banks and Monetary Policy Outlook

Rate signals elsewhere are also shaping conditions for non-yielding bullion. The Bank of Japan said core inflation is “quite close” to 2% and hinted at further tightening, while the Bank of England warned policy “is not restrictive enough” as second-round inflation risks build.

Technical Range and Price Levels for Gold

Technically, gold has been range-bound between $4,100 and $4,200 for a third day of losses; a break below $4,100 would open $4,073, then $3,996, followed by $3,959 and the YTD low at $3,941. On the upside, resistance sits at $4,200, then the 100-day SMA at $4,235 and the 50-day SMA at $4,321, with $4,500 above. RSI remains bearish but has stabilised.

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