Gold edged higher on Monday, supported by fading expectations that the Federal Reserve will raise interest rates in October. However, the recovery from Friday’s losses following the US non-farm payrolls report remained limited, and the metal continues to trade within a bearish technical framework.
The spot price is hovering on the lower side of a near-term consolidation range, above a fresh multi-week low that was contained by the 76.4% Fibonacci retracement of the $3942–$4697 rally. Upticks have so far failed to break above a descending trendline, keeping the larger downtrend in play.
Technical picture favours bears
Daily chart studies remain in a full bearish configuration, suggesting that once the current consolidation phase ends, the downside will likely resume. The market is waiting for a decisive break below two closely watched levels: $4120 (a Fibonacci level) and the $4100 round number. A sustained move beneath those would confirm the negative signal and open the path toward the key $4000 support zone.
On the upside, the immediate barrier is the bear-trendline at $4211. A sustained break above that would ease the downward pressure, but a more meaningful reversal signal would require a move above the congestion top at $4225. Only then would the near-term focus shift higher.
Key levels to watch
Traders are monitoring the following price points:
- Resistance: $4170, $4211 (trendline), $4225 (congestion top), $4274
- Support: $4120 (Fibo), $4100 (round figure), $4021, $4000 (psychological level)
The $4000 mark is seen as a major floor. A break below it could signal a deeper correction, while a rally above $4225 would suggest the bearish momentum is fading.
For the latest price action, check the live gold price.
Key takeaways
- Gold edged higher on Monday but gains were capped by a bear-trendline at $4211.
- The daily chart remains in a full bearish configuration, favouring further downside.
- A break below $4120 and $4100 would confirm the negative signal and target $4000.
- A sustained move above $4225 is needed to signal a potential reversal.
Common questions
What does the bear-trendline indicate?
A bear-trendline is a descending line drawn on a price chart that connects lower highs. When the price stays below this line, it suggests that the overall trend remains downward. In gold’s case, the trendline at $4211 is acting as resistance, capping any recovery attempts.
Why is the $4000 level important?
The $4000 level is a psychological round number and a key support zone. A break below it would likely trigger further selling, while holding above it could attract buyers looking for a bargain.
Gold’s near-term outlook remains bearish unless the price can break above the trendline and the congestion top at $4225. Until then, the path of least resistance is lower.