Gold Struggles Near $4,000 as Macro Headwinds Intensify

Gold is currently testing the $4,000 support level, trading at $3,983.60 per troy ounce. The precious metal faces significant macro headwinds as markets digest the prospect of a Federal Reserve rate hike in December, despite expectations for a hold at the upcoming October 27-28 meeting. Sticky inflation and elevated 10-year yields are increasing the opportunity cost of holding non-yielding assets.

Geopolitical tensions in the Middle East and Ukraine provide a floor for prices, acting as a persistent safe-haven bid. However, the recent break below the $4,000 psychological threshold has triggered technical selling and profit-taking, leading to the steepest weekly decline in over four months.

Looking ahead, traders are closely monitoring real yields and the US dollar index for further direction. While central bank buying remains a structural support, the immediate focus remains on the Fed's policy trajectory and the impact of rising energy costs on broader inflation expectations.