Date: October 31, 2025
Author: Naveed Anjum – Market Analyst, GoldFxPro
Gold prices hover near $4,010 as a strong U.S. Dollar and easing U.S.–China tensions limit upside. Read the latest XAU/USD forecast, key levels, and outlook for traders.
Introduction
Gold prices (XAU/USD) hovered around $4,010 per ounce on Friday, heading for a second straight weekly loss as traders digested the outcome of the Trump–Xi meeting and the Federal Reserve’s cautious tone. The U.S. Dollar stayed near a three-month high, keeping gold’s recovery limited. Despite near-term pressure, gold remains up nearly 50% year-to-date, supported by central bank buying and ongoing geopolitical risk.
1.Fed Caution Limits Gold’s Upside
The Federal Reserve’s latest statement left investors unsure about another rate cut in December. Chair Jerome Powell said further easing is not a foregone conclusion, which immediately lifted the U.S. Dollar and capped gold’s intraday rebound. A stronger greenback makes gold more expensive for overseas buyers, dampening short-term demand.
Markets have now reduced the odds of a December rate cut to 74.8%, down from over 90% last week (Source: Reuters). The shift has injected volatility into gold trading, with investors weighing the Fed’s mixed tone against slowing global growth.
2.Trump–Xi Meeting Eases Trade Tensions
Optimism grew after U.S. President Donald Trump and China’s Xi Jinping reached a tentative one-year truce on rare-earth exports and soybean purchases. Washington agreed to lower tariffs on fentanyl-related imports to 10%, while Beijing pledged to cap mining output.
While this progress boosted risk sentiment, it also reduced safe-haven demand for gold. Traders began rotating into risk assets such as equities, reflecting relief over improved U.S.–China relations. Still, analysts remain skeptical about the deal’s longevity and warn that renewed tensions could quickly revive gold buying.
(Source: Bloomberg )
3.Central Banks and Geopolitics Keep Floor Under Gold
According to the World Gold Council, global central banks purchased 220 tons of gold in Q3, up 28% from the previous quarter. Kazakhstan led the buying spree, and Brazil made its first purchase in four years.
Meanwhile, geopolitical concerns remain. Trump’s order to resume U.S. nuclear testing and Russia’s vow to retaliate have kept investors cautious. Combined with uncertainty around the U.S. government shutdown now entering its fifth week, gold continues to hold psychological support around $3,900.
(Source: fxstreet.com )
4.Technical Analysis XAU/USD Holds Above $3,900
Gold’s technical picture shows a market in consolidation. The metal is trading near $4,010, struggling to break the $4,050 resistance zone, which aligns with the 20-day moving average.
- Immediate Resistance: $4,045 – $4,079
- Key Support: $3,885 – $3,900
- Deeper Support: $3,845 – $3,800
- Bias: Neutral to mildly bearish
Failure to hold above $4,000 could open a drop toward $3,885, while a decisive break above $4,079 may trigger a short-covering rally toward $4,150–$4,200. Momentum indicators like RSI are stabilizing near mid-range, signaling a potential base-building phase.
5.Market Sentiment Traders Cautious but Still Long-Term Bullish
Despite current weakness, sentiment among institutional investors remains constructive. Renewed buying in China and Singapore, coupled with seasonal demand ahead of India’s wedding season, provides a modest floor for prices.
Gold dealers in India, however, have started offering discounts of up to $5 an ounce, reflecting post-festival softness. Traders are keeping positions light ahead of the November–December macro events that could redefine the next trend.
Source Links:
Reuters | Bloomberg | FXStreet | TradingEconomics
Quick Picture (What I See)
Gold is trading around $4,004, hovering near the short-term downtrend line drawn from the $4,350 all-time high. The market has been in a corrective phase after that massive selloff from the top, forming lower highs and lower lows on the 1H chart.
After bouncing from the $3,880 support zone, bulls are trying to push back into the $4,000–$4,040 zone. However, the trendline and previous supply area are still capping the upside. Overall, gold is consolidating between $3,880–$4,050, with signs of potential accumulation before a decisive breakout.
The bias remains neutral-to-bearish in the short term unless we see a clean break above $4,050.
Key Support & Resistance (Levels to Watch)
| Zone | Level | Description |
|---|---|---|
| Major Resistance | 4,155 – 4,180 | Previous swing high and breakdown zone |
| Resistance 2 | 4,080 – 4,050 | Active descending trendline resistance and prior supply |
| Resistance 1 | 4,020 – 4,030 | Short-term rejection zone; minor order block |
| Pivot Area | 4,000 | Psychological level where bulls and bears are fighting |
| Support 1 | 3,940 – 3,950 | Minor pullback base and former bounce zone |
| Support 2 | 3,880 – 3,890 | Recent low and green accumulation box with volume spike |
| Support 3 | 3,820 – 3,840 | Key structure support, potential liquidity sweep area |
| Major Demand Zone | 3,750 – 3,780 | Deep correction zone if market loses momentum |
Trade Idea
Setup A – Momentum Long (Breakout Play)
Plan: Buy the breakout above $4,050 once confirmed with volume.
- Entry: 4,055 – 4,065 (above trendline breakout)
- Stop Loss: 4,015
- Take Profit 1: 4,120
- Take Profit 2: 4,180
- Risk/Reward: 1:2.5 to 1:3
Why
The price has been building a base near $3,900 and rejecting further downside. A close above $4,050 would confirm the break of the descending trendline and shift momentum bullish again. Volume confirmation and candle close above the zone would be key signals that buyers are regaining control.
Setup B – Fade / Short at Resistance (Rejection Play)
Plan: Sell near the 4,040–4,060 resistance if the breakout fails.
- Entry: 4,035 – 4,045 (after bearish rejection candle)
- Stop Loss: 4,070
- Take Profit 1: 3,960
- Take Profit 2: 3,900
- Risk/Reward: 1:2 to 1:3
Why
The 4,040–4,060 area aligns with the descending trendline and recent supply. If price rejects this zone again, sellers may resume control for another leg down toward $3,900. A failed breakout would trap late buyers and trigger a fast selloff.
Tactical Rules to Follow (Be Strict)
- Only trade after 1H candle close confirmation, not on intrabar spikes.
- Avoid trading the first 15 minutes after major US news (especially NFP, PCE, or Fed speeches).
- Always wait for clear volume confirmation before breakout entries.
- Use a fixed Stop Loss and never widen it. Trail profits once TP1 is hit.
- If DXY rises above 108 or US yields surge, avoid long trades.
- Never add to a losing position—stick to one controlled risk per setup.
Short-Term Forecast (Next 24–72 Hours)
If Fed or USD Outlook Turns Dovish:
Gold could accelerate above $4,050 and retest $4,120–$4,180, with momentum building toward $4,220. Traders may see a short squeeze as buyers regain confidence.
If Market Stays Neutral / Cautious:
Expect sideways consolidation between $3,940–$4,050, forming a triangle structure. Price will likely remain range-bound until a new macro trigger emerges.
If USD Outlook Turns Hawkish:
Gold may reject the $4,050 zone and retest $3,900, possibly extending to $3,840. Strong US data or yields above 4.5% could weigh heavily on XAU/USD.
Summary Line:
Tonight’s tone decides whether this pullback is a pause or a deeper correction.
My Personal Thoughts
Honestly, this market feels like a quiet storm to me. I can see that gold bulls are staying patient but ready every time price dips near $3,900, buyers step in strongly, which tells me there’s solid accumulation happening down there. Still, unless gold can break above $4,050 with conviction, I feel the confidence in this rally will stay fragile.
Personally, I’m respecting both sides of this tight range. For me, it’s not about trying to predict the next big move it’s about reacting smartly to what the chart confirms. Whether I see a clean breakout or a rejection back to support, my focus is on staying patient and disciplined.
Gold often loves to fake out traders before showing its real move. So I remind myself to stay calm, let the market reveal its direction, and trade what I see not what I feel.
Why is gold falling today
Gold is slipping because the U.S. Dollar remains strong after the Fed signaled that a December rate cut isn’t guaranteed.
How did the Trump–Xi meeting affect gold prices
Their trade truce boosted global risk sentiment, reducing demand for safe-haven assets like gold.
What is the current gold support and resistance
Support sits near $3,885–$3,900, while resistance is at $4,045–$4,079.
Are central banks still buying gold
Yes. The World Gold Council reported 220 tons of central bank purchases in Q3, led by Kazakhstan and Brazil.
What’s the short-term forecast for gold
Gold is expected to consolidate near $4,000. A break above $4,050 could trigger gains, while a drop below $3,885 risks further downside.
