Gold has crashed 31% from its January record of $5,598 to a one-year low near $3,870 on October 30. Six forces explain why gold is falling, while the charts show where the selloff could stop.
The metal has since bounced to about $4,136, nearly 7% above the low, after the US midterm results weakened the dollar. Whether the rebound lasts depends on a cluster of resistance levels overhead.
Why Is Gold Falling? The 6 Main Reasons
1. A hawkish Federal Reserve. The Fed raised rates to 3.75–4.00% in September, its first hike since July 2023. It held rates on October 28 but left the door open to more tightening.
Traders now price about 78% odds of another 25-basis-point hike in December, according to FedWatch. Meanwhile, inflation has stayed above the Fed’s 2% target for 67 straight months.
2. Higher yields and a firm dollar. The 10-year Treasury yield touched 5.34% in early October. Higher yields raise the opportunity cost of holding gold, which pays no interest.
3. The oil shock. The US-Iran conflict pushed Brent crude to around $112. Pricier energy lifts inflation expectations, which in turn raises the odds of further Fed hikes. As a result, gold has tended to fall when oil rises this year.
4. Forced selling. On October 30, gold dropped about 3.5% in a single session as the Nasdaq slid 2.9%. Commerzbank analysts suggested the tech rout may have pushed investors to sell safe-haven assets to cover losses. Silver fared even worse, as a recent silver price analysis shows.
5. ETF outflows. Gold ETFs posted a $1.21 billion net outflow in the week to October 23, per World Gold Council data. That ended a 13-week inflow streak, with US funds leading the redemptions.
6. Weak Chinese jewelry demand. China’s gold jewelry consumption fell 33.9% year-on-year in the first nine months of 2026, per Xinhua. Bar and coin demand rose 26.3%, leaving total consumption nearly flat.
Not every signal is bearish, however. Central banks bought 321 tonnes in the third quarter, the fastest pace since late 2024. Global gold ETF holdings also reached a record 4,256 tonnes, as the World Gold Council’s latest demand data showed.
Gold Trades Furthest Below Its 200-Day Average Since 2013
The SPDR Gold Shares ETF (GLD) tracks spot gold closely. According to Barchart, it now trades below its 200-day moving average by the widest margin in 13 years.
The last comparable stretch came in 2013. That April, gold suffered a sharp two-day crash. The selloff marked the start of a bear market that lasted until late 2015.
However, extreme gaps below the 200-day average also tend to precede relief rallies. At the October 30 low, gold sat roughly 13% below the current 200-day level of $4,468. With price near $4,136, that gap has narrowed to about 7%.
Weekly Chart Shows a Bearish Trend Despite the Bounce
Gold has printed a series of lower highs and lower lows since the January peak. The Supertrend indicator turned bearish in June 2026 and now sits at $4,582.
Price also trades below the 20-week moving average (blue line) at $4,211. That average acted as support throughout the 2025 rally but has since flipped to resistance.
Still, the current weekly candle shows a gain of about 6.7%. Gold bounced from the 0.5 Fibonacci retracement at $3,943, inside the $3,900–$4,000 support zone. The weekly candle has not closed yet, so the bounce still needs confirmation.
The Relative Strength Index (RSI) reads 45.6 after rebounding from the mid-30s. However, no weekly bullish divergence has formed yet.
If the rally extends, the 20-week moving average at $4,211 is the first hurdle. Above it, the $4,300–$4,400 zone aligns with the 0.382 Fibonacci level at $4,333.
Gold Price Prediction Hinges on the $4,145 Gaussian Channel Test
The daily chart remains bearish, with gold trading below the Gaussian Channel. Price is now testing the channel’s lower band at $4,145 as resistance. Thursday’s high of $4,147 tagged that band almost exactly.
A daily close above $4,145 could open a move toward the channel midline at $4,272. That target sits just below the 0.382 Fibonacci level at $4,333, roughly 3% to 5% above current price.
A rejection, however, would put the $3,900–$4,000 support zone back in focus. A daily close below the 0.5 Fibonacci level at $3,943 could expose the 0.618 retracement at $3,552, about 14% lower.
The 200-day moving average (blue line) at $4,468 remains the key level for a trend reversal. It has rolled over and now slopes downward. Gold would likely need to reclaim it to return to a bullish trend.
On the positive side, the daily RSI has climbed to 52.8. It crossed above both its signal line and the 50 midline, an early sign of improving momentum.
What Could Drive Gold Next
Macro data will likely decide which way gold breaks. The US jobs report on Friday, CPI on November 10, and the Fed’s December 8–9 meeting are the next catalysts.
The midterm results have already offered some relief. Democrats won both chambers of Congress, pushing the dollar index to a one-month low near 101.3. The 10-year yield also eased to about 4.85%.
Brent crude has dropped about 15% this month to near $98. The slide followed reports of US-Iran peace talks, which also lifted gold.
Analysts remain split on the bottom. JPMorgan Private Bank’s Yuxuan Tang expects further Fed hikes and sees more downside risk.
“Gold will find a solid bottom when rates peak.”
In contrast, Standard Chartered’s Suki Cooper flags $3,886 as the level gold needs to hold. She still expects a longer-term recovery, driven by dollar diversification and currency debasement themes.
If gold holds $3,943 and clears $4,145, the bounce could extend toward $4,333. A close below $3,870, however, would suggest the 31% crash has further to run.
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