GOLD – downside remains exposed after bears broke through key $4000 support

Gold remains in volatile mode, with sharp price swings continuing since late last night’s update, keeping both bullish and bearish scenarios in play.

A brief wave of optimism followed Tuesday’s close above $4100, but subsequent gains failed to meet the minimum upside criteria, as recovery attempts stalled below the daily Tenkan-sen barrier at $4164, leaving the key $4200 level unreachable and the downside exposed.

Overnight action reflected renewed bearish sentiment, with the metal falling sharply to test critical support at $4000 – a psychological level reinforced by the daily Kijun-sen and the 38.2% Fibonacci retracement of the $3311–$4381 rally. A quick rebound from this zone underscored the importance of this support.

Short-term movement remains highly choppy around the $4100 area, highlighting indecision but also keeping pressure on the pivotal $4000 level. Bearish hourly indicators (negative momentum and a 30/200HMA bearish crossover) continue to support a downside scenario, though the broader technical structure remains bullish, suggesting that the latest pullback—despite being the largest correction since 2022—may offer a fresh opportunity to rejoin the uptrend if $4000 holds and bullish signals emerge.

A sustained break below $4000 would open the way for a deeper correction towards $3900 and $3850, temporarily pausing the broader bullish cycle.

On the fundamental side, sentiment remains largely unchanged, with focus on the anticipated Trump–Xi meeting, expected to help ease trade tensions between the world’s two largest economies and potentially reduce safe-haven demand. Markets are also awaiting the delayed release of US inflation data on Friday, which will likely shape expectations ahead of next week’s Fed meeting, where investors continue to price in two rate cuts before year-end.

Res: 4128; 4167; 4200; 4225
Sup: 4000; 3972; 3900; 3850