Gold rebounds from three-month low and retakes $4,000 on weak USD; focus remains on FOMC

Gold prices rebounded from a three-month low, surpassing the $4,000 mark during the Asian trading session. This came as the U.S. Dollar showed signs of weakness. President Donald Trump announced he would not initiate military action against Iran, causing crude oil prices to briefly soar. Federal Reserve officials did not seem eager to raise interest rates soon, adding to support for the precious metal.

The U.S. manufacturing sector showed strong growth in October, with the Purchasing Managers Index reaching a 53-month high. Service sector activity also met expectations, and output prices surged to the highest level since August 2022. However, inflation concerns persist due to high energy costs, which may push the Federal Reserve to tighten monetary policy further.

Geopolitical risks from ongoing U.S.-Iran talks also weighed on the dollar, potentially limiting upside for gold. Traders will closely monitor the Federal Open Market Committee meeting, as well as other economic indicators such as the Advance Q3 GDP report and PCE Price Index, all of which will influence the near-term direction of the U.S. Dollar.