Gold, after briefly breaking above the psychological level of $4,000, has retreated below this threshold and is now trading at $3,995. This pullback, following an unprecedented 50% rally this year and reaching a record high of $4,381, indicates a natural phase of profit-taking and consolidation. HSBC analysts recently raised their 2025 price target to $3,355 and their 2026 forecast to $3,950, showing that despite the current correction, the long-term outlook remains positive. You can also visit the Trendo platform and utilize advanced trading tools and features to conduct your analyses with greater precision and confidence.
Technical Analysis of Gold (October 29, 2025)
From a technical perspective, gold is in a sensitive consolidation phase. The $4,000 level, which previously served as psychological support, has now turned into resistance. The 50-day moving average forms the first strong support, indicating a potential 12% decline from the all-time high. A pattern of lower highs is forming, confirming short-term bearish momentum. Declining trading volume suggests sellers do not yet have full control, and the market is awaiting a new catalyst. To resume the uptrend, gold must break above $4,000, and for the correction to continue, breaking $3,950 could open the path toward the 50-day SMA. The long-term ascending trendline from $3,544 remains intact.
Fundamental Analysis of Gold (October 29, 2025)
Various fundamental factors are influencing gold prices. The strengthening US dollar, which moves inversely to gold, has created selling pressure. Resilient US economic data has reduced expectations for aggressive Federal Reserve rate cuts, increasing the opportunity cost of holding gold. However, strong structural factors continue to support gold. Central banks’ ongoing purchases for reserve diversification and reducing dollar dependence persist. Geopolitical tensions, sovereign debt concerns, and persistent inflation maintain demand for safe-haven assets. If inflation remains higher than expected and the Federal Reserve is compelled to maintain expansionary policy, gold could benefit from lower real yields and a weaker dollar.
Final Thoughts
The current correction in gold represents an opportunity to enter at better prices rather than the end of an uptrend. Given strong structural support including central bank buying, geopolitical tensions, and fiscal concerns, the long-term outlook remains positive. If inflation stays elevated and geopolitical uncertainty continues, gold could reach $4,300-$4,500. However, if higher interest rates persist, a longer consolidation period is likely.
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