Gold analysis today: The main factors behind the consecutive decline

Current Image: Gold Under Multidimensional Pressure

Gold prices are experiencing a continuous decline for the fourth consecutive session, with the metal falling into the range of $4,010 – $4,020 per ounce during today’s trading. This decline reflects the simultaneous impact of several negative factors: the rising value of the US dollar, diminished hopes for upcoming interest rate cuts, and the prevailing wait-and-see cautious market sentiment ahead of key economic data releases.

Dollar Dominance Over Price Trends

The US dollar plays a pivotal role in shaping gold’s current direction. As the dollar index rises, gold becomes more expensive for holders of other currencies, reducing both genuine and speculative demand. The strong dollar in recent weeks has exerted direct pressure on investor sentiment.

On the market level, the dollar index maintained high levels during today’s trading, benefiting from factors such as uncertainty regarding US monetary policy. This stability at strong levels was enough to prompt investors to sell some of their gold holdings, especially as market movements became more sensitive to US currency fluctuations.

Diminishing Expectations for Rate Cuts

Market expectations for US rate cuts have significantly decreased. While markets previously anticipated nearly a 100% chance of a new cut after the September decision, this probability has fallen to just 42% recently, according to Federal Reserve monitoring tools.

This shift resulted from hawkish statements by several central bank officials, notably the Fed Vice Chairman, who emphasized the need for “caution and gradualism” in any additional cuts, considering the economic conditions still balanced between labor market risks and inflation.

Theoretically, gold loses its appeal in high-interest environments because it does not generate direct yields compared to other instruments. Therefore, expectations of maintaining high interest rates continue to exert downward pressure on the precious metal.

The Information Gap: Impact of the Government Shutdown

The extended US government shutdown lasting six weeks created a rare state of market uncertainty. Key economic data releases such as inflation indicators, retail sales, and labor market reports were halted, leaving traders without a clear basis for decision-making.

In this informational void, investors primarily relied on official statements and personal opinions of central bank officials. The result was volatile repricing of monetary policy expectations, negatively impacting gold prices.

Now, with the government back in operation, the market awaits a flood of economic data that could clearly define the upcoming monetary policy path.

Critical Moments Ahead: FOMC Minutes and Jobs Report

This week features two pivotal events:

FOMC Minutes (Wednesday): The minutes are expected to reveal policymakers’ views on inflation and labor market balance. Any signals favoring maintaining high rates will directly pressure gold prices.

Non-Farm Payrolls (Thursday): This report is the strongest tool for December expectations. If the report is strong, it will reinforce the idea of a resilient economy that does not need rate cuts, which is negative for gold. Conversely, signs of slowdown could revive rate cut prospects and support the metal.

Until these data are released, market movement will remain limited and cautious, with modest fluctuations not reflecting true trends.

Long-Term Support: Ongoing Structural Factors

While gold faces short-term pressures, fundamental factors continue to support the metal in the long run:

Geopolitical Tensions: Ongoing events in various regions, including regional conflicts and military developments, create uncertainty. This increases demand for safe-haven assets like gold.

US Debt Concerns: Rising public debt and increasing budget deficits push investors to seek hedging instruments against future economic risks.

Central Bank Shifts: Central banks worldwide, especially in China and Russia, continue increasing their gold reserves. This reflects a long-term desire to diversify reserves and reduce reliance on the dollar.

These factors suggest that any current downward wave may be temporary, and gold will maintain its appeal for investors seeking stability and security.

Technical Outlook: Key Levels to Watch

Gold is currently trading near $4,018 after retreating from the high of $4,381. On the four-hour chart, clear selling pressure is evident, especially after the price failed to sustain rebounds.

Main Support Levels:

• $4,000: A significant psychological barrier that may see strong reactions
• $3,928: The strongest current support on the chart
• $3,700: A historical support level that the price may target in continued decline

Main Resistance Levels:

• $4,045: First immediate resistance for rebounds
• $4,120: Important secondary resistance
• $4,245: The key resistance to break for a trend reversal

The Relative Strength Index (RSI) is around 35, indicating weak bullish momentum and approaching oversold levels. Trading volumes do not show panic selling, suggesting a gradual decline rather than a sharp collapse.

Performance of Other Metals: Unified Decline

Pressure is not limited to gold alone. Other precious metals have also declined simultaneously:

Silver fell by 1.2% to $49.58 per ounce, reflecting risk appetite weakness. Platinum declined by 1% to $1,517.73, affected by reduced industrial demand, especially from the automotive sector. Palladium dropped by 1.5% to $1,372.05, for similar industrial reasons.

This uniform decline confirms that all precious metals are influenced by the same combination of dollar strength, falling rate expectations, and short-term economic data uncertainty.

Summary: Critical Wait Before Action

Gold is currently under multiple-front pressures, but this does not necessarily threaten the long-term trend. The coming weeks are crucial; if economic data indicate a slowdown, gold could rally strongly. If economic strength persists, downward pressure may continue briefly.

In any case, long-term structural factors remain supportive, and geopolitical risks have not disappeared. In other words, the current dip could be an opportunity for long-term investors, especially at key support levels.