Introduction
Gold futures (GC) closed slightly lower on Wednesday, extending the recent pullback after the metal’s record-breaking surge earlier this month. The pullback has now reached 11.2% and price action remains subdued as traders await this week’s key Federal Reserve policy decision, which could set the tone for gold’s next major move. Despite short-term softness, the broader trend continues to show strength, with buyers defending important support levels.
Technical Analysis
On the daily chart, gold is in a steady consolidation phase after its sharp rally to around $4,400 (R3) earlier in October. It’s now testing the $3,950–$4,000 area, near the R1 pivot at $4,012.9, an important short-term area for buyers and sellers.
The 50-day moving average at $3,834.1 sits just below current prices and acts as strong support. As long as gold stays above it, the overall uptrend remains in place.
If gold breaks below $3,800, momentum could shift more clearly to the downside, with the next support near $3,619.7 — the S1 pivot and September’s breakout level.
On the upside, resistance comes in at $4,012–$4,050, then $4,152.7 (R2), which previously capped gains. If gold can reclaim that zone, bulls could aim for another run at $4,400.
Right now, price action looks like a corrective flag — often a pause before another move higher in a broader uptrend.
Key Technical Levels
| Type | Level | Description |
|---|---|---|
| Resistance 1 | $4,012–$4,050 | R1 pivot / immediate resistance zone |
| Resistance 2 | $4,152.7 | R2 pivot / prior rejection level |
| Resistance 3 | $4,400 | R3 high / October peak |
| Support 1 | $3,950 | Near-term horizontal support |
| Support 2 | $3,834 | 50-day moving average |
| Support 3 | $3,620 | S1 pivot / September breakout base |
Probability Table (Next 2–3 Weeks)
| Scenario | Estimated Probability | Notes |
|---|---|---|
| Range-bound consolidation ($3,900–$4,100) | 50% | Neutral momentum; market awaiting Fed guidance. |
| Breakout above $4,100 → target $4,250–$4,400 | 35% | Bullish continuation if rate outlook softens. |
| Breakdown below $3,830 → target $3,620 | 15% | Technical correction if yields rebound sharply. |
Fundamentals
Gold is taking a breather after a strong month of gains fueled by falling U.S. yields, safe-haven buying, and Fed policy speculation. With the Fed’s decision coming this week, traders are cautious. Rates are expected to stay unchanged, but any shift in the Fed’s outlook will depend on inflation and jobs data.
The U.S. Dollar Index (DXY) has stabilized around 99–100, easing some short-term pressure on gold. Still, ongoing geopolitical risks and central bank buying continue to support gold in the long run.
If the Fed sounds more dovish or signals a longer pause, gold could quickly push toward $4,200–$4,400. But if the Fed takes a more hawkish stance, gold may pull back further — though downside risk is likely limited while global uncertainty remains high.
