On Wednesday, gold (XAU/USD) continued to rise steadily throughout the day, repeatedly reaching new weekly highs and approaching the 20-day SMA amid broad-based weakness in the US dollar. The Democratic Party's victories in the House of Representatives and the Senate have increased the likelihood of political gridlock in Washington. In addition, rising political uncertainty has prompted investors to reallocate capital into safe-haven assets, leading to a decline in US Treasury yields. This has put pressure on the dollar and provided support for the precious metal.

Nevertheless, hawkish expectations regarding the Federal Reserve's policy decisions are limiting further gains in gold. According to CME Group's FedWatch tool, market participants see nearly an 80% probability of an interest rate hike at the Fed's December meeting. These expectations strengthened following Tuesday's release of the US Department of Labor's JOLTS report on job openings and labor turnover, which showed that hiring remained steady in September. In particular, the number of job openings increased to 7.523 million, compared with the upwardly revised August figure of 7.190 million. Combined with steady economic growth and persistent price pressures, these figures reinforce expectations of further monetary policy tightening by the Federal Reserve in the near term, keeping gold below resistance in the $3,970–$3,977 level, where the 20-day SMA is located.

Meanwhile, the geopolitical risk premium remains elevated despite attempts to find a diplomatic solution to the conflict between the United States and Iran, which has been ongoing for eight months. According to the latest reports, on Tuesday, President Donald Trump told the Financial Times that the United States had no immediate plans to strike Iran, despite Israeli Prime Minister Benjamin Netanyahu hinting at a possible attack toward the end of this week.

At the same time, a senior Iranian official told Reuters that the Strait of Hormuz would only be reopened if sanctions were lifted and the US naval blockade was ended. In addition, Iran's Islamic Revolutionary Guard Corps (IRGC) claimed that four tankers that had struck mines south of the Strait of Hormuz had been destroyed. These developments increase risks to oil supplies and fuel concerns about inflation driven by volatile energy prices. In turn, this creates conditions that could prompt further monetary policy tightening by the Federal Reserve.

Today, traders should wait for the release of US macroeconomic data to identify better trading opportunities. These releases include the ADP private-sector employment report and the ISM Services PMI. In addition, fresh geopolitical developments could provide further momentum for gold prices. Attention should remain focused on Friday's US Nonfarm Payrolls (NFP) report, a key indicator that will influence demand for the US dollar and determine the precious metal's short-term direction.

Nevertheless, given the current fundamental backdrop, it would be prudent to wait for confirmation that buying momentum is continuing before concluding that XAU/USD has formed a bottom and is ready for further recovery following its decline to the low recorded last Friday, which was the lowest level since September 2025.

From a technical perspective, XAU/USD maintains a bearish bias, trading below the 20-period Simple Moving Average (SMA) and all other key SMA levels. The oscillators are in negative territory, confirming the sellers' advantage. The nearest resistance is the 20-day SMA. Key support is located at $2,870, where buyers may attempt to halt the decline if selling pressure persists.