Gold prices rose slightly on Tuesday, after posting significant losses of 4% in the previous session. The yellow metal is currently trading near the bearish channel’s middle line on the four-hour chart; if it manages to break above, it could parry its losses and rise toward resistance levels at $4,220 then $4,264. On the downside, if the price resumes its downward trend, it is likely to test support levels near $4,094 then $4,054.
Global markets remain focused on the outlook for U.S. monetary policy, currency movements, and developments in the oil market. Expectations of further interest-rate hikes by the Federal Reserve amid persistent inflation are supporting the U.S. dollar and pushing Treasury yields higher. At the same time, oil prices are facing pressure as hopes for a potential truce between Washington and Tehran increase, although concerns over supply disruptions continue to provide support for crude prices. Investors are closely monitoring upcoming economic data, central-bank signals, and geopolitical developments for further direction across financial markets.
Market Watch
Fed Officials Expect Further Rate Hikes to Curb Elevated Inflation
Expectations are growing that the U.S. Federal Reserve could continue raising interest rates in the coming period, as inflation remains elevated and above the central bank’s 2% target.
The Federal Reserve raised its benchmark interest rate by 25 basis points at its latest meeting on September 16, bringing the target range to 3.75%–4.00%. The central bank said inflation remains elevated and that monetary policy is aimed at supporting a return of inflation to its 2% target.
Concerns over persistent price pressures have remained evident in recent comments from several Federal Reserve officials. Federal Reserve Governor Lisa Cook said in a speech on Monday that inflation had risen by around 3.8% over the 12 months through August, while core inflation increased by approximately 3.4%. She noted that inflation has remained elevated for an extended period and pointed to higher oil prices and supply-chain disruptions linked to the conflict in the Middle East as potential sources of additional inflationary pressure.
Earlier, New York Federal Reserve President John Williams said another interest-rate increase before the end of the year could be appropriate if inflationary risks persist, while emphasizing that future monetary-policy decisions will depend on incoming economic data.
Other Federal Reserve officials have also indicated that persistent inflation could require further monetary tightening. The latest projections show that a majority of Fed policymakers see the possibility of another rate increase during 2026, while financial markets are assigning a relatively high probability to a hike at the October meeting.
Markets are closely monitoring upcoming U.S. inflation and labor-market data, which will be key factors in determining the Federal Reserve’s next policy move. Meanwhile, higher Treasury yields and expectations that interest rates could remain elevated for longer have provided support for the U.S. dollar and increased pressure on interest-rate-sensitive assets.
Dollar Heads for Weekly Gains as Treasury Yields Rise
The U.S. dollar rose on Tuesday and remained on track for weekly gains, supported by a sharp increase in U.S. Treasury yields, while persistent inflation concerns and expectations of tighter monetary policy boosted demand for the greenback.
The U.S. Dollar Index, which measures the currency against a basket of major currencies, rose to around 101.2, remaining close to a two-month high. The index has recorded strong gains in recent sessions, supported by higher Treasury yields and growing expectations that the Federal Reserve could raise interest rates again.
U.S. Treasury bonds came under heavy selling pressure, pushing yields higher. The 10-year Treasury yield climbed to its highest level since 2007, while the 30-year yield reached its highest level since 2004. Meanwhile, the two-year yield, which is particularly sensitive to monetary-policy expectations, approached 5% and reached its highest level in more than two years.
The rise in yields comes amid growing inflation concerns, particularly following higher oil prices, prompting investors to reassess the outlook for U.S. interest rates. Markets are currently pricing in a probability of more than 70% of a Federal Reserve rate hike in October, up from around 57% a week earlier, according to the CME Group’s FedWatch Tool.
Investors are also awaiting a series of key U.S. economic indicators this week, including Personal Consumption Expenditures (PCE) inflation data and the nonfarm payrolls report, for further signals on inflation, economic strength, and the Federal Reserve’s future monetary-policy path.
In currency markets, the euro fell to around $1.1344, its lowest level in three months, while the British pound declined to approximately $1.3228, remaining close to its three-month low as major currencies continued to face pressure from the stronger dollar.
The dollar’s performance remains closely linked to Treasury yields and expectations for interest rates. Higher U.S. yields tend to support the currency by increasing the attractiveness of dollar-denominated assets, while investors continue to monitor oil prices and geopolitical risks for their potential impact on inflation.
Oil Prices Fall as Hopes Grow for a Truce Between Washington and Tehran
Oil prices declined in recent trading as hopes grew that renewed negotiations between the United States and Iran could lead to an agreement to ease tensions in the Middle East. However, concerns over continued supply disruptions limited the decline in crude prices.
The move comes as U.S. and Iranian officials engage in separate contacts through mediators in an effort to reach a settlement to the conflict. Negotiations are expected to focus on an amended Iranian proposal for a seven-day ceasefire, which includes reopening the Strait of Hormuz, one of the world’s most important routes for oil and gas shipments.
Oil prices also declined last week as investors assessed the possibility of a truce between Washington and Tehran. Brent crude fell around 0.8% to $105.73 per barrel, while West Texas Intermediate (WTI) declined approximately 1.7% to $93.05 in trading on September 25.
Nevertheless, the oil market continues to face upward pressure from the risk of supply disruptions in the region. Recent data showed that crude oil exports from major Middle Eastern producers rose to around 12.8 million barrels per day in September, the highest level since February, supported by increased shipments from Saudi Arabia and the United Arab Emirates. However, part of these supplies is being transported through alternative routes that are more costly and less efficient due to disruptions to maritime traffic.
On the diplomatic front, Iranian Foreign Minister Abbas Araghchi held talks with Qatari mediators in New York, while sources said that communications between Washington and Tehran remain ongoing. U.S. President Donald Trump, meanwhile, denied making concessions to Iran, including easing sanctions or releasing frozen Iranian funds, highlighting the significant differences that remain between the two sides.
Investors are closely monitoring the outcome of these diplomatic efforts. A potential agreement could improve shipping conditions through the Strait of Hormuz and increase oil flows into global markets, while a failure of negotiations or a renewed escalation in tensions could keep a geopolitical risk premium embedded in crude prices.