Gold Struggles Below $4,000 as Analysts Warn of Deeper Pullback
Saturday, November 1st 2025
Market Mood Turns Cautious After Stellar Rally
The gold market entered the new week under pressure, extending last week’s sharp losses. Spot prices slipped below the key $4,000 level as technical selling and renewed optimism in global equities weighed on the precious metal. Despite the decline, analysts maintain that the long-term uptrend remains intact — though a deeper short-term correction may still lie ahead.
By Monday afternoon, spot gold traded at $4,004.50 per ounce, marking a more than 2% drop on the day after sliding 3% last week. The pullback follows gold’s failure to recover from one of its steepest single-day losses in recent years.
Trade Optimism Shifts Market Sentiment
The catalyst behind the latest selloff appears to be the easing of geopolitical tensions between the U.S. and China. News of an agreed framework for trade negotiations lifted investor confidence and pushed equity markets to fresh highs — drawing capital away from safe-haven assets.
Fawad Razaqzada, Market Analyst at City Index and FOREX.com, said gold’s decline mirrors the strength in risk assets.
“As risk sentiment improved, the S&P 500 reached new records, leaving safe-haven assets like gold on the back foot,” he explained. “While optimism has risen, the deeper structural issues — national security and technology competition — remain unresolved.”
Razaqzada added that the drop below $4,000 was not unexpected given the recent volatility.
“The $4K level is psychologically significant,” he noted. “If gold stabilizes here, dip-buyers could reemerge. But if it holds below this threshold, more liquidation could follow.”
Technical Momentum Favors the Bears
From a technical standpoint, analysts see growing downside momentum. David Morrison, Senior Market Analyst at Trade Nation, pointed out that gold’s MACD indicator has turned sharply lower.
“The daily MACD shows momentum shifting to the downside. Gold needs to break back above $4,100 to reignite bullish sentiment,” Morrison said.
Consolidation May Be Ahead
Ole Hansen, Head of Commodity Strategy at Saxo Bank, expects gold may settle into a prolonged consolidation phase, similar to the four-month sideways pattern after its breakout above $3,000 per ounce.
“The recent action suggests the high for the year may already be behind us,” Hansen said. “Support sits near $3,846 — a key retracement from August’s surge. Any recovery could take time as traders grow more cautious and equity markets strengthen.”
He also warned that investors should temper expectations for near-term rallies.
“The next major leg higher could be a 2026 story,” Hansen added, noting that the metal’s year-to-date rise of over 50% may have outpaced fundamentals.
Analysts View Pullback as a Healthy Pause
Chantelle Schieven, Head of Research at Capitalight, sees the pullback as part of a broader, constructive pattern.
“We’re watching support near $3,750, which aligns with gold’s 50-day moving average,” she said. “This looks more like a healthy consolidation than a structural downturn.”
Schieven reiterated that the long-term outlook remains favorable.
“Macroeconomic risks and ongoing policy uncertainty continue to support gold’s role as a strategic hedge,” she noted.
Outlook: A Breather, Not a Breakdown
While sentiment has cooled after months of relentless gains, most analysts agree that gold’s broader bull market remains intact. A test of lower technical levels could shake out short-term traders, but strong physical demand and persistent economic uncertainty still underpin the metal’s long-term trajectory.
For now, the battle around $4,000 per ounce stands as the defining test — a line between short-term fatigue and the next phase of gold’s enduring rally.
