XAUUSD loses ground, but geopolitical risks limit the decline

XAUUSD quotes are edging lower as the market attempts to find a local bottom. Prices currently stand at 4,136 USD. For more details, see our analysis for 5 October 2026.

XAUUSD forecast: key takeaways

• The probability of a Federal Reserve rate hike in October has plunged to 17% from 64% a week earlier
• HSBC analysts lowered their average gold price forecast for 2026 from 4,560 to 4,490 USD
• XAUUSD forecast for 5 October 2026: 3,995

Fundamental analysis

XAUUSD prices are falling for the second consecutive trading session, with sellers poised to test the 4,115 USD support level. However, a deeper decline in gold is being constrained by a sharp weakening of hawkish market expectations. Following the release of softer US PCE inflation data, traders now estimate the likelihood of an October Fed rate hike at just 17%, down from 64% a week earlier.

Major investment banks have begun to revise their long-term estimates for the precious metal. In particular, HSBC analysts lowered their average gold price forecast for 2026 from 4,560 to 4,490 USD per ounce, reflecting a more cautious assessment of gold’s further upside potential. Nevertheless, the bank’s experts emphasise that sustained demand from global central banks remains a strong supporting factor and will continue to limit the depth of the correction.

XAUUSD is also supported by persistently high demand for safe-haven assets amid the prolonged confrontation in the Middle East. Investors are monitoring threats to energy infrastructure in the Persian Gulf. Any new escalation could immediately intensify safe-haven capital flows into physical gold, limiting the potential for a further decline in XAUUSD quotes and bringing buyers back into the market.

Technical outlook

XAUUSD quotes are falling after breaking below the lower boundary of the ascending channel. Prices remain below the EMA-66, indicating continued selling pressure. Today’s XAUUSD forecast suggests a further decline towards 3,995 USD.

Technical indicators continue to give bearish signals. The Stochastic Oscillator has rebounded from the descending resistance line, indicating the likelihood of further bearish movement. A further signal in favour of a decline would be a consolidation below 4,105 USD. A breakout below this level would confirm increased selling pressure and raise the probability of continued downside momentum.

An alternative scenario would come into play if prices break above the 4,235 USD resistance level and consolidate above it. In this case, quotes would move outside the descending channel, indicating increased buying pressure and creating conditions for an upward correction.

XAUUSD overview

• Asset: XAUUSD
• Timeframe: H4 (Intraday)
• Trend: bearish
• Key resistance levels: 4,165 and 4,235
• Key support levels: 4,105 and 3,995

XAUUSD trading scenario for today

Trading scenario (Sell Stop)

A consolidation below the local support level, with prices breaking below 4,105 USD, would open the door for continued bearish momentum towards 3,995.

• Current price: 4,136
• Entry level: 4,105
• Take profit: 3,995
• Stop loss: 4,135
• Risk-to-reward ratio: more than 1:3

The trade idea is valid until 8:00 AM on 6 October 2026 (server time, UTC+3).

Risk factors

Risks to the bearish XAUUSD scenario are associated with a further easing of expectations for a Federal Reserve rate hike and continued strong central bank demand for gold. An additional risk factor is an escalation of the geopolitical situation in the Middle East, which could boost demand for safe-haven assets and bring buyers back into XAUUSD.

Summary

The current decline in XAUUSD towards the 4,115 USD support level is driven by selling pressure; however, the depth of the correction is being sharply constrained by the drop in the probability of an October Fed move to 17%. Strong demand from global central banks provides medium-term support for the precious metal.

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