By GoldFXPro | Analyst: Naveed Anjum | Updated: October 30, 2025
Gold price finds support near $3,940 as traders eye a potential rebound toward $4,060. XAU/USD technical outlook points to renewed bullish momentum amid improving sentiment.
Introduction
Gold is quietly making its move again, and this time it feels like the smart traders are moving with it. After scraping the $3,900s, the gold price (XAU/USD) has bounced back to around US $3,970/oz, catching a second wind as the US dollar drifts and safe-haven demand creeps back in. The spotlight? A much anticipated meeting between Donald Trump and Xi Jinping, which is injecting both hope and caution into the market. A clear deal could calm traders and ease the bid for gold, while any sign of breakdown might send bullion soaring on fear. Meanwhile, the Federal Reserve’s recent rate cut and weaker economic data are reminding investors that even in a brighter trade backdrop, the structural case for gold remains very much alive. So if you’re watching XAU/USD, this is one of those setups where emotion meets strategy.
Source: Reuters Gold pares gains after Fed Powell’s comments despite rate cut Reuters
1.Major Fundamental News #1: Fed Rate Cut Leaves Questions
The Fed made the expected move cutting interest rates by 25 basis points but what traders are really digesting is the tone that came with it. Fed Chair Jerome Powell warned that the next cut isn’t guaranteed and that the economic picture remains uncertain. Reuters That warning sent the US dollar slightly firmer, which typically isn’t good for gold. But here’s where things get interesting: the mix of a rate cut plus cautious commentary is keeping the door open for gold’s appeal without letting the rally run away. For gold bulls, this is an emotional mix of relief (that the rate cut is here) and vigilance (because more cuts might not come).
2.Supporting Fundamental Factor #2: Dollar Weakness and Safe-Haven Demand
While the Fed’s message tempered some bullishness, gold still finds support thanks to the somewhat weaker dollar and heightened safe-haven demand. The US government shutdown is still ongoing, creating uncertainty about economic data and fueling safe-asset flows. Reuters When the dollar softens, gold becomes more attractive for globally-based buyers. Add in the fact that traders are a little nervous about the upcoming meeting between Trump and Xi, and you have the kind of backdrop that encourages gold to rebound from dips.
3.Market Sentiment & Safe-Haven Demand
Market sentiment is patchy right now on one side, traders hope for a trade deal between the US and China, which would shift things toward risk-on and potentially hurt gold. On the other side, the lingering uncertainties (shutdown, Fed outlook, global risks) are giving gold a safe-haven window. Earlier this week, gold dipped to a three-week low amid trade optimism but is now trying to recover. Reuters In short, the mood is: “We’ll buy gold if fear returns, but we’re also watching for relief in trade talk to possibly turn us away.” That emotional push-pull is making gold’s moves sharper.
XAU/USD Technical Forecast: Gold Finds Support at $3,940, Eyes $4,060 Next
Gold appears to be catching its breath and quietly regrouping. After hitting a rough patch, XAU/USD found solid footing around US $3,940/oz, a key support zone that is drawing renewed buyer interest. With the daily rate hovering near this level, the structure suggests that if price can hold above that base, the next meaningful upside target is close to US $4,060/oz. Technically speaking, this target aligns with recent swing highs and moving‐average resistance just overhead. Traders who traded the pull-back are now watching for a clean breakout if it happens, the mood could shift back into bullish. But if support gives way, the comfort zone could shrink quickly. Source: FXStreet Gold Forecast: XAU/USD bounces up, looks to the $4,060 record high. FXStreet
Quick Picture (What I See)
Gold is currently trading around $3,970, after a steady recovery from the $3,880–3,900 demand zone. The broader trend remains corrective, following the sharp drop from the All-Time High near $4,360. The market is still forming lower highs and lower lows, signaling that we are inside a medium-term descending channel, but short-term bulls are trying to regain control.
The recent rebound from the green accumulation zone ($3,880) shows that buyers are defending this area strongly. Price is now testing the descending trendline resistance, drawn from the October 21st swing high. Until a clean breakout above $4,000–$4,020, the market remains in retracement mode rather than full bullish reversal.
The structure:
- Higher timeframe: corrective phase after all-time high.
- Medium-term: descending trendline intact.
- Short-term: bullish bounce inside correction.
- Momentum: mild bullish recovery within broader downtrend.
Key Support & Resistance (Levels to Watch)
| Level | Type | Zone Description |
|---|---|---|
| 4,120 – 4,160 | Major Resistance | Key supply zone from previous swing top and distribution before major fall. |
| 4,040 – 4,060 | Resistance 2 | Former support-turned-resistance area; breakdown zone with volume cluster. |
| 3,995 – 4,010 | Immediate Resistance | Trendline and intraday sellers’ base; breakout level needed for upside continuation. |
| 3,950 – 3,960 | Pivot Area | Minor consolidation zone, midpoint between recent high/low. Acts as intraday control level. |
| 3,910 – 3,925 | Support 1 | Fresh demand seen on chart; small green box with visible buying volume. |
| 3,870 – 3,890 | Support 2 | Strong accumulation area, buyers stepped in aggressively; “green accumulation box.” |
| 3,820 – 3,840 | Support 3 | Major horizontal level from previous breakout base, psychological pivot. |
Trade Ideas
Risk Management Note
Always risk no more than 1% per trade. Adjust lot size to match your account equity and stop distance.
Setup A Momentum Long (if breakout above $4,010)
- Plan: Buy the breakout above trendline and resistance to ride short-term momentum.
- Entry: Above $4,015 (confirmation candle close above the trendline).
- Stop Loss: Below $3,975 (40-point risk buffer).
- Take Profit 1: $4,060
- Take Profit 2: $4,120
- Risk/Reward: Approx. 1:2.5
- Why: A confirmed breakout would shift intraday bias bullish. Volume clusters suggest liquidity above $4,000 where stops may trigger a quick push higher.
Setup B Fade / Short at Resistance (if rejection at $4,000–4,020)
- Plan: Sell the rejection from trendline resistance if price fails to break above $4,000 area.
- Entry: Between $3,995 – $4,010 (watch rejection candle or bearish engulfing).
- Stop Loss: Above $4,045 (to stay above false break wicks).
- Take Profit 1: $3,935
- Take Profit 2: $3,880
- Risk/Reward: Approx. 1:2.8
- Why: The market remains in a descending structure. Sellers defended this zone twice already. Risk is limited and payoff is attractive if trendline holds.
Tactical Rules to Follow
- Wait for 1H candle close confirmation above or below breakout zone before entry avoid impulse trades.
- Always check DXY and US 10Y yields before taking any position; gold moves inversely.
- Do not trade during high-impact news (FOMC, NFP, GDP) wait for volatility to settle.
- Keep stop loss outside structure zones, not at exact support/resistance.
- Trail stops once price moves 50% toward target to lock partial profit.
- If both setups trigger indecisively (choppy movement), stay flat capital preservation is strategy too.
Short-Term Forecast (Next 24–72 Hours)
If Fed or USD outlook turns Dovish:
Gold could break above $4,010, attracting momentum buyers. A daily close above $4,060 will open the door for a move toward $4,120–4,150. The correction might end, turning structure bullish again.
If Neutral/Cautious Tone
Expect sideways consolidation between $3,920–4,020. Price will likely build a base before next directional breakout. Volatility may compress with smaller candles and low volumes.
If Hawkish or USD strengthens again
Rejection near $4,000–4,020 could send gold back to $3,900 and potentially retest $3,870–3,880 demand. Sustained selling below $3,850 would resume broader downtrend toward $3,800.
Summary Line:
Tonight’s tone decides whether this bounce is a new rally or just another pullback inside the correction.
Example Position Sizing Rule
If your account equity = $10,000
Risk per trade = 1% → $100
Stop Loss distance = $30 (per oz)
Position size = $100 ÷ $30 = 3.3 oz (0.33 lots on MT5)
Keep it mechanical don’t oversize. Gold can move 20–40 points quickly respect volatility.
Final Checklist Before Placing the Trade
- Check DXY direction rising DXY = bearish gold, falling DXY = supportive for longs.
- Confirm 1H or 4H candle close beyond breakout/rejection zone.
- Avoid first spike after major news; let market absorb liquidity.
- Make sure spread < $1.00 before entering.
- Review position size and SL placement twice.
Personal Thoughts
From my perspective, Gold is currently in a very interesting zone it’s showing signs of strength after a heavy correction, but the conviction from buyers isn’t fully confirmed yet. The $4,000 mark feels psychologically heavy, almost like a wall the market keeps testing but hasn’t cleanly crossed. I personally believe that if we get one strong daily close above that level, momentum could shift fast in favor of the bulls. Until then, I see this phase as a patience game a time to stay disciplined, trade levels, and let the market reveal its true direction instead of forcing a bias.
Bottom Line
Gold is standing at a crucial turning point near the $4,000 level the next breakout or rejection will define short-term direction. Patience and discipline are key now; let the market show its hand before taking the next move.
Why is XAU/USD recovering now
Because the dollar is softening and safe-haven demand is creeping back in amid U.S. government shutdown fears and indecision from the Fed.
What is the key support level for gold right now
Around US $3,940/oz. If gold holds above that, it gives a base for further upside.
What will push gold above US $4,060
A clean breakout above US $4,020–4,030 combined with a weaker dollar or renewed risk uncertainty would likely drive that move.
What could make gold fall again
Positive trade news, strong U.S. data, or a stronger dollar could all hurt gold’s safe-haven appeal and send it lower toward US $3,900 or below.
Is now a good time to buy gold
It can be, but I’d say wait for confirmation—either a breakout above resistance or a strong bounce off support rather than jumping in right away.
