Gold – bulls pause briefly before next assault on the $4000 barrier
Gold remains the standout performer in the markets, consolidating modestly in early Tuesday trading after surging through the \$3900 level and setting a new record high at \$3977 on Monday, as the metal now tests the pivotal \$4000 barrier.
The recent rally has been fueled by a combination of strong drivers, including heightened expectations for two 0.25% Fed rate cuts in October and December, intensifying geopolitical and economic uncertainty, and escalating political instability marked by the U.S. government shutdown, the resignation of France’s prime minister, and a second no-confidence vote against EC President Ursula von der Leyen within three months. These developments continue to underpin strong safe-haven demand and sustain bullish sentiment toward gold.
Despite encountering resistance near the \$4000 threshold and facing an extremely overbought setup on the daily chart, price pullbacks remain limited as traders show little appetite for aggressive profit-taking. Initial support is seen at \$3940 (23.6% Fibonacci retracement of the \$3819–\$3977 advance), followed by trendline and intraday higher low support at \$3926, and stronger technical levels at \$3916 (38.2% retracement) and \$3912 (rising hourly cloud top), which should ideally contain any near-term dips.
A break below the \$3900 area (psychological level and 50% retracement) would weaken the broader bullish structure and open the door for a deeper corrective phase.
Res: 3955; 3977; 4000; 4020
Sup: 3940; 3926; 3916; 3900
