Gold recovered some intraday losses while oil swung on mixed supply signals, and the market is monitoring how energy prices will affect the Fed's future rate path.

It is gold's sensitivity to oil swings that is driving its moves now: traders are trying to gauge whether high energy prices will keep inflationary pressure high enough to justify more Fed hikes. The cheaper oil becomes, the fewer arguments the Federal Reserve will have to continue tightening. This would benefit gold — an asset with no yield — while the dollar and short?term interest rates would lose some recent support.

The diplomatic backdrop adds uncertainty on several fronts. President Donald Trump will speak at the UN General Assembly in New York and has indicated he is prepared to meet his Iranian counterpart Masoud Pezeshkian on the sidelines, fueling the prospect of de?escalation and pushing oil down. If such a meeting takes place and produces real progress, oil could fall further, dragging down inflation expectations and providing additional support for gold regardless of Fed decisions.

At the same time, the market is parsing comments from Fed officials after last week's unanimous rate hike — the first in three years. Chicago Fed president Ostan Gulsby said on Monday the central bank cannot ignore recurring and persistent supply shocks and must respond in ways that may hurt the economy. St. Louis Fed President Alberto Musalem went further, saying additional hikes may be needed to reach the inflation target that has been missed for more than five years. The implication is clear: the firmer the rhetoric from regional Fed presidents, the higher the risk to gold through rising real yields — yet the stronger gold's role as a hedge against the threat of prolonged, economy?hurting policy.

Several other Fed officials are scheduled to speak today and should be watched closely.

Structural support for the metal is coming from physical demand: China's gold imports, as the world's largest consumer, have been record?high this year amid falling global prices and a stronger yuan. Customs data, compiled since 2017, show purchases through August exceeded 1,000 tonnes, surpassing the total for all of 2025. Such demand benefits Chinese importers and the global gold market overall, as steady physical buying from Asia offsets potential outflows from ETFs in the face of high Fed rates.

In my view, the key trigger for gold in the coming days will be not so much Fed rhetoric — already largely priced in — but the outcome of a possible Trump?Pezeshkian meeting on the UN sidelines. Real progress on reopening the Strait of Hormuz could continue to drive oil lower and ease inflationary pressure, opening the way for gold back above $4,350. A breakdown in talks and renewed escalation would quickly reverse both oil and gold.

On the technical side, buyers need to take the nearest resistance at $4,372 to aim for $4,424, above which further advances would be difficult. The next extended target is around $4,481. On the downside, bears will try to seize control of $4,304; if they succeed, a breakdown would seriously damage bull positions and push gold toward a low of $4,249 with the prospect of reaching $4,186.