Gold (XAU) traded at $3,903 an ounce on Monday morning, up 0.7% after Friday's slide below $4,000 left it at its lowest close since October 2025. The metal fell more than 3% on Friday as a selloff in technology stocks spread across markets and investors kept pricing another Federal Reserve rate hike in December.
Friday's drop came on the last trading day of October, so the same close also ended the week and the month. On my charts, that close broke the floor gold had defended since June, and it leaves room for a deeper slide toward $3,445.
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Why Did Gold Drop Below $4,000?
The trigger was equities . Weak quarterly results from Amazon and Intel on Thursday evening deepened a rout in AI-linked stocks, and gold fell with them instead of acting as a haven. Core PCE inflation, the Fed's preferred gauge, rose to 3.1% year on year in the latest release, which kept rate hikes on the table after the Federal Reserve left rates unchanged on Wednesday.
Oil above $100 a barrel adds to the inflation worry, as the US conflict with Iran keeps Gulf shipping under pressure. Ole Hansen, head of commodity strategy at Saxo Bank, said investors who bought gold-backed ETFs since July now sit on losses, with Bloomberg data showing holdings fell by six tonnes last week.
"In the short term, technical sellers remain in control, with deteriorating price momentum triggering further long liquidation," Hansen said in emailed comments on Monday.
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He added that hedge funds have been net sellers of gold futures for nine straight weeks of Commitments of Traders data. October was gold's second monthly decline in a row, with front-month futures down about 7%.
What Broke on Gold's Daily Chart
Since the record near $5,600 set in late January, gold has traded in a descending triangle. The upper side is a falling trend line drawn through the January, March and August highs. The lower side is a horizontal floor near $3,941 that held every test in June, July and August.
The August test matters for continuity. In my August gold analysis, I flagged a possible breakout above that trend line with targets of $4,755 and $4,855. Gold topped out near $4,700 at the line instead, and a September close below $4,370 invalidated the call.
Friday's close at about $3,874 sits below the $3,941 floor on the daily, weekly and monthly charts at once. Both daily exponential moving averages are well above the price, with the 50-day near $4,173 and the 200-day near $4,265.
How Low Can Gold Go?
My first target is $3,445, which capped gold from April to August 2025 before the breakout that took it to records. That level is 11.7% below Monday's price of $3,903.
It is also the zone I targeted in my June bearish gold analysis, which pointed to $3,440 before the August rebound put that call on hold.
The weekly chart shows the same break, and the next reference there is the 200-week exponential moving average near $3,295, or 15.6% below the current price. The 50-week average near $4,215 is now overhead.
On the monthly chart, the October candle closed below the same $3,941 level that supported the June and July candles. The 50-month exponential moving average is near $3,232, about 17% below spot, which would be the end point of a full return to the long-term trend.
Gold Price Prediction: Scenarios Below $4,000
| Scenario | Confirmation | Target | Invalidation |
|---|---|---|---|
| Base case: triangle breakdown | Weekly close stays below $3,941 | $3,445 (-11.7%) | Daily close back above $3,941 |
| Extended slide | Weekly close below $3,445 | $3,295, then $3,232 | Weekly close back above $3,445 |
| Defensive recovery | Close back above $3,941 and $4,000 | 50-day EMA near $4,173 | Fresh close below $3,874 |
Every percentage uses Monday's price of $3,903 as the reference. Gold already trades about 28% below its January peak, according to Coinbase Institutional's weekly market commentary.
What Banks Still Expect for Gold
Bank forecasts sit well above the market. CIBC expects gold to average $4,500 an ounce in the fourth quarter, according to the Globe and Mail's October 16 roundup of analyst calls, about 15% above Monday's price.
Helaba's September forecast table puts gold at $4,800 for the fourth quarter. A Reuters poll published on October 27 cut the median 2026 average to $4,495 but raised the 2027 median to $4,650.
David Morrison, senior market analyst at Trade Nation, said the selling could mark the end of the correction from January's highs. "Yet another way of looking at it is that both are in the process of a full bull capitulation," he wrote of gold and silver on Friday.
Gold still matters to trading volumes at retail brokers, where it drove 91% of CFD activity at ACCM in the first quarter.
What Would Cancel the Bearish Case
The only defensive scenario on my charts is a return above the new resistance at $3,941 and then above $4,000. Hansen also sees a recovery above $4,000 as the condition for a more neutral short-term outlook.
Two events this week can move the price before that test. The US midterm elections take place on Tuesday, and the October payrolls report follows on Friday. A daily close above $4,000 after either would turn Friday's break into a failed breakdown.
