Gold reclaims $4,060 as Oil retreats ahead of crucial Fed decision

Gold prices rebounded to $4,060 on Tuesday, climbing over 1% despite a stronger US Dollar and rising US Treasury yields. The metal's rise was attributed to falling Oil prices, particularly West Texas Intermediate (WTI), which dropped more than 1% to $100.05 per barrel due to ongoing Middle East conflict concerns. Geopolitical tensions appeared to stall talks between the US and Iran, with potential US and Israeli attacks on Tehran potentially on the horizon after midterm elections.

While consumer confidence improved in October, inflation expectations remained unchanged at 5.8%. The ADP Employment Change 4-week average also softened to 16.8K. Market focus was on the Federal Reserve's (Fed) decision on Wednesday, with traders expecting a potential rate hike. Central banks, including the European Central Bank (ECB) and Bank of Japan (BoJ), are also expected to raise rates, amid fears of rising energy prices.

Gold's bullish momentum was supported by a bullish harami candle pattern, with the price breaching October's 23-day high of $4,034. However, caution was advised due to a bearish Relative Strength Index (RSI) reading. Gold's primary role as a safe-haven asset and hedge against inflation and depreciating currencies, along with central bank holdings, contributed to its appeal during turbulent times.