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25.09.202610:45 Forex Analysis & Reviews: XAU/USD – Price Analysis and Forecast: The Fed's Hawkish Stance and Geopolitical Risks Keep Gold Under Pressure

Relevance up to 08:00 2026-09-26 UTC+00

Exchange Rates 25.09.2026 analysis

On Friday, gold (XAU/USD) remained in consolidation, staying close to the weekly low set the previous day amid a predominantly bearish fundamental backdrop.

The U.S. dollar paused after a sharp rise to a two-week high, providing some support for the commodity. However, hawkish rhetoric from the U.S. Federal Reserve, high U.S. bond yields, and persistent geopolitical uncertainty are strengthening the position of dollar bulls, keeping the precious metal below the $4,300 level.

After raising interest rates in September, Fed officials have been sending persistent hawkish signals, hinting at the possibility of further monetary policy tightening. On Wednesday, Federal Reserve Governor Michael Barr said that, given rising inflation risks and the resilience of the economy, the U.S. central bank would likely continue raising interest rates. In addition, the results of a private survey showed that U.S. business activity reached its highest level since July 2021, while prices paid by companies for resources rose to levels not seen in almost four years. On Thursday, New York Fed President John Williams also noted that another interest rate hike this year appeared quite reasonable.

Williams made a highly decisive statement, receiving a score of 7.2 out of 10 on the FXS Speechtracker Index (versus a historical average of 6.2), highlighting a more hawkish stance than the baseline scenario. His emphasis on the resilience of the economy, reduced risks to maximum employment, and strong demand for artificial intelligence technologies, together with his statement that another rate hike by the end of the year would be justified, points to the Fed's intention to keep inflation under control despite the absence of clear forward guidance.

The FXS Fed Sentiment Index declined by 0.18 points to 148.63, indicating some moderation in hawkish sentiment. However, it remains significantly above the neutral level of 100, confirming the Fed's hawkish policy stance and supporting the dollar even as high yield levels are being revised.

Exchange Rates 25.09.2026 analysis

In addition, inflation risks associated with high energy prices, driven by geopolitical tensions in the Middle East and the possibility of a 90-day ban on U.S. diesel fuel exports, are reinforcing expectations of further monetary policy tightening by the Fed. This is pushing U.S. bond yields to multi-year highs. For example, the yield on 10-year U.S. Treasury bonds are at a level not seen since July 2007, supporting the dollar and limiting gold's upward potential. In addition, uncertainty over the future of the conflict between the United States and Iran is strengthening the dollar as a safe-haven asset and calls for caution among XAU/USD bulls.

Among recent developments, Donald Trump's statement earlier this week is worth noting, when he said that he had considered taking tough military action against Iran. Meanwhile, Iranian President Masoud Pezeshkian stated that Iran remained committed to its nuclear program, creating risks for a peaceful resolution of the conflict. The escalation is being reinforced by actions taken by the Houthis in Yemen, who carried out missile strikes and attacks on strategic facilities in Saudi Arabia. This keeps the geopolitical risk premium relevant and again highlights the potential for the dollar to strengthen.

From a technical perspective, the short-term outlook for gold remains bearish as long as the price stays below the 200-period simple moving average (SMA). A confident break above this zone would be required to weaken bearish sentiment. The oscillators are negative, confirming the bears' advantage.

The table below shows the percentage change in the U.S. dollar exchange rate against major currencies this week. The U.S. dollar recorded its largest gain against the Australian dollar.

Exchange Rates 25.09.2026 analysis

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2026
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