Gold prices tumbled to a two-week low on Thursday, pressured by repeated attempts by the market to breach the crucial $4,100 support level. The downward momentum in the precious metal was further accelerated by surging oil prices, which climbed higher in response to growing signals of an escalation in the ongoing conflict in the Middle East. As geopolitical risks drive energy markets upward, broader macroeconomic factors, including stubbornly high domestic inflation, are continuing to weigh heavily on non-yielding assets like bullion.
Recent economic data out of the United States has highlighted persistent inflationary pressures, showing that both the Consumer Price Index (CPI) and the Producer Price Index (PPI) remain locked in an upward trajectory. These persistent indicators strongly imply that the Federal Reserve will maintain its current stance, keeping interest rates elevated for an extended period rather than pivoting toward monetary easing in the near term. This prospect of prolonged high interest rates has provided continuous support for the US dollar, making dollar-denominated gold more expensive for holders of other currencies and dulling its appeal as a safe-haven asset despite geopolitical uncertainties.
Market attention is now firmly fixed on the upcoming macroeconomic calendar, with the Federal Reserve scheduled to meet next week for its critical policy gathering. Financial markets have widely priced in a hawkish hold scenario for the October 28 policy meeting, anticipating that central bank officials will signal a cautious approach to any future interest rate cuts. Additionally, the release of the US September Personal Consumption Expenditures (PCE) Price Index, which serves as the Federal Reserve’s preferred gauge for underlying inflation, is scheduled for October 29. This crucial data point is expected to heavily contribute to the central bank’s ongoing monetary policy direction and shape expectations for the remainder of the year.
From a technical perspective, another decisive violation of the $4,100 pivot level has firmed up a negative near-term market structure for gold. An eventual daily or weekly close below this important threshold would confirm a strong bearish signal, clearing the path for a sustained downward attack toward the key $4,000 support zone. This psychological and technical support area also includes notable spike lows previously recorded at $3,942 and $3,960.
Following the breakdown, the previously defended $4,100 level has now reverted to acting as initial resistance. Above this immediate ceiling lie additional technical hurdles, including the broken Fibonacci level at $4,120 and the falling 20-day moving average, which is currently tracking at $4,152. This moving average has accurately mirrored the broader downtrend observed since early September, serving as the first major upper breakpoint that bulls would need to reclaim to stabilize the market. Further resistance up the chain stands at the $4,190 mark, while downside cushions are identified at the immediate support levels of $4,021, followed by the psychological $4,000 zone, and the deeper swing lows of $3,960 and $3,942.
