Gold hits three-week low, will bulls step in at 50-day moving average?
2025-10-28 19:40:37
Spot gold fell sharply during the European trading session on Tuesday (October 28), falling more than 2% to a three-week low. Gold prices fell below key technical levels, and traders shifted from safe-haven assets to risky assets due to easing US-China trade tensions.
The market has clearly broken below the pivot level of $4100.43, as well as two swing lows of $4004.28 and $3944.43. With these support levels broken, the gold market appears poised to test the next major area, the range between the 50% retracement level of $3846.50 and the 50-day moving average of $3782.23.
Gold hit by trade optimism and pre-Fed profit-taking
The selling pressure stemmed from Trump's hints at a possible trade deal with China and recent progress in bilateral talks. A series of new trade and critical minerals agreements announced with Southeast Asian nations further boosted risk sentiment, pushing Asian stocks higher and weakening safe-haven demand.
“Hopes of avoiding a full-blown trade war ... are driving gains in risk-correlated assets such as equities,” said Ricardo Evangelista of ActivTrades. “On the other hand, this is negatively impacting demand for safe-haven assets such as gold.”
The decline also comes ahead of the Federal Reserve's policy decision on Wednesday, where a rate cut is widely expected. While low interest rates typically support non-yielding assets like gold, the market appears to be reducing risk ahead of Powell's speech. Traders will be closely watching for any forward guidance that could recalibrate expectations for the Fed's policy path through year-end.
Technical breakdown reveals deeper support level
From a technical perspective, gold has entered bearish territory after breaking below the $4100.43 pivot level and losing the swing lows of $4004.28 and $3944.43. This paves the way for a test of the $3846.50 level, the key 50% retracement of the recent rally, and below it lies the 50-day moving average of $3782.23. This area could attract bargain hunters and trigger some short covering, but unless bulls can hold this area and reclaim $3944.43, the overall bias remains to the downside.
The long-term outlook remains, but a short-term correction has occurred
Despite this week’s pullback, gold’s overall trend remains bullish, supported by central bank buying, geopolitical uncertainty and declining confidence in fiat currencies.
After hitting an all-time high of $4,381.44 on October 20, spot gold prices are still up more than 50% this year.
However, short-term momentum has clearly stalled. Citigroup recently lowered its 0-3 month gold price forecast to $3,800, while Capital Economics sees gold prices falling to $3,500 by the end of 2026 – suggesting further downside before a long-term bullish setup is re-established.
Gold Price Forecast: Sellers in control unless bulls hold $3782.23
(Source of spot gold daily chart: Yihuitong)
Currently, the path of least resistance is to the downside. If the $3846.50–$3782.23 range fails to hold, sellers may apply pressure towards deeper retracements.
A rebound from this range could trigger a short-term rebound of 50% of the sell-off decline, but bulls need to reclaim the currently unknown level to change the short-term structure.
The Fed’s interest rate statement and Powell’s press conference may determine whether gold finds a bottom — or continues its decline into November.
The market has clearly broken below the pivot level of $4100.43, as well as two swing lows of $4004.28 and $3944.43. With these support levels broken, the gold market appears poised to test the next major area, the range between the 50% retracement level of $3846.50 and the 50-day moving average of $3782.23.
Gold hit by trade optimism and pre-Fed profit-taking
The selling pressure stemmed from Trump's hints at a possible trade deal with China and recent progress in bilateral talks. A series of new trade and critical minerals agreements announced with Southeast Asian nations further boosted risk sentiment, pushing Asian stocks higher and weakening safe-haven demand.
“Hopes of avoiding a full-blown trade war ... are driving gains in risk-correlated assets such as equities,” said Ricardo Evangelista of ActivTrades. “On the other hand, this is negatively impacting demand for safe-haven assets such as gold.”
The decline also comes ahead of the Federal Reserve's policy decision on Wednesday, where a rate cut is widely expected. While low interest rates typically support non-yielding assets like gold, the market appears to be reducing risk ahead of Powell's speech. Traders will be closely watching for any forward guidance that could recalibrate expectations for the Fed's policy path through year-end.
Technical breakdown reveals deeper support level
From a technical perspective, gold has entered bearish territory after breaking below the $4100.43 pivot level and losing the swing lows of $4004.28 and $3944.43. This paves the way for a test of the $3846.50 level, the key 50% retracement of the recent rally, and below it lies the 50-day moving average of $3782.23. This area could attract bargain hunters and trigger some short covering, but unless bulls can hold this area and reclaim $3944.43, the overall bias remains to the downside.
The long-term outlook remains, but a short-term correction has occurred
Despite this week’s pullback, gold’s overall trend remains bullish, supported by central bank buying, geopolitical uncertainty and declining confidence in fiat currencies.
After hitting an all-time high of $4,381.44 on October 20, spot gold prices are still up more than 50% this year.
However, short-term momentum has clearly stalled. Citigroup recently lowered its 0-3 month gold price forecast to $3,800, while Capital Economics sees gold prices falling to $3,500 by the end of 2026 – suggesting further downside before a long-term bullish setup is re-established.
Gold Price Forecast: Sellers in control unless bulls hold $3782.23
(Source of spot gold daily chart: Yihuitong)
Currently, the path of least resistance is to the downside. If the $3846.50–$3782.23 range fails to hold, sellers may apply pressure towards deeper retracements.
A rebound from this range could trigger a short-term rebound of 50% of the sell-off decline, but bulls need to reclaim the currently unknown level to change the short-term structure.
The Fed’s interest rate statement and Powell’s press conference may determine whether gold finds a bottom — or continues its decline into November.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
