The recovery to the $4,000 threshold offers a technical respite after gold hit a low of $3,975 on Friday. While the Federal Reserve is widely expected to pause interest rate hikes during its October 27–28 session, market participants remain wary. Futures markets currently price in a 90% probability of an unchanged rate, yet traders still assign an 80% chance to at least one 25-basis-point increase by December, citing resilient economic activity and persistent price pressures.

Energy markets are currently serving as the primary catalyst for this volatility. Brent crude retreated toward $114 a barrel as diplomatic efforts in Tehran aimed to ease tensions in the Strait of Hormuz. For gold, the easing of energy-driven inflation expectations provides immediate support, even as the metal remains caught between geopolitical uncertainty and a restrictive monetary outlook. Investors are now turning their attention to a heavy calendar of economic data, including third-quarter GDP estimates and PCE inflation figures, which will dictate whether the Fed signals further tightening or a more dovish stance.