Gold falls for the fourth session.. What governs prices in November?

Gold Price Outlook: Short-Term Pressures and Long-Term Support Factors

Precious metals experience a turbulent day, with gold leading the way. Gold prices have declined for the fourth consecutive session, with the price dropping to the 4,010 – 4,020 per ounce range this morning. The decline is not random but driven by clear factors currently governing the market, foremost among them: the strength of the US dollar and the decreasing likelihood of interest rate cuts.

The picture is not as bleak as it appears on the surface. In the long term, gold retains strong structural support factors: ongoing geopolitical tensions, concerns over US debt, and central banks’ trends toward increasing their reserves of precious metals. These factors provide a solid foundation that prevents a complete collapse of prices.

Why is the dollar putting pressure on gold prices now?

The US dollar plays the “lead role” in the current gold price forecast game. The stronger the dollar, the higher the cost of gold for investors holding other currencies, leading to a decline in both actual and speculative demand. Specifically this week, the dollar index maintained strong levels, benefiting from the prevailing cautious sentiment in the markets.

Result: the price slipped easily downward. When the precious metal loses its upward momentum, speculative capital quickly withdraws, deepening the decline. The clear indicator now: a stronger dollar means weaker gold.

Falling interest rate expectations: the shift that changed the mood

Markets had priced in a very high probability of an additional rate cut after the September decision, but this scenario gradually unraveled. The chances of a cut dropped from 100% to just 42% according to Federal Reserve monitoring tools.

What happened? First, the prolonged US government shutdown halted the release of economic data for six full weeks. The absence of this data left the market in the dark, relying solely on official statements. Most of these were hawkish. Fed Vice Chair Philip Jefferson emphasized the need to “proceed cautiously” with any further cuts, considering the risks of persistent high inflation to be balanced with concerns about the labor market.

This rhetoric changed everything. Investors recalculated: higher rates for longer = less attractiveness for yieldless gold. The prices immediately reflected this reversal.

Delayed economic data flood the markets: prepare for volatility

Now, with the government back in operation, markets are set for a “flood of data,” including the non-farm payroll report (Thursday) and the Fed meeting minutes (Wednesday). This week is crucial in determining the upcoming trend of gold price expectations.

If the employment report shows unexpected economic strength, it will reinforce the narrative that rate cuts are unnecessary now, which is a bearish scenario for gold. Conversely, signs of slowdown could revive the possibility of cuts, supporting prices.

The Fed minutes may reveal whether the hawkish tone reflects a consensus within the committee or just individual opinions. Any indication of a preference to keep rates high will immediately pressure gold prices.

Technical analysis: where is the price now?

Gold is trading around $4,018, a clear decline from the recent high at $4,381. On the 4-hour chart, the bearish pressure is relentless.

Critical levels:

Support levels to watch:

• 4,000: a strong psychological barrier often triggering short-term rebounds
• 3,928: the strongest support levels on the chart currently
• 3,700: a historical support that could attract significant buying

Main resistances:

• 4,045: the first direct obstacle to any rebound
• 4,120: a secondary resistance that may slow the upward movement
• 4,245: the key resistance, and breaking it is essential for any meaningful reversal

The RSI (RSI) is at 35, close to oversold territory but not yet there. This indicates room for further decline before a technical rebound occurs.

Trading volumes have not shown significant spikes, suggesting the decline is not driven by panic selling but rather a gradual retreat lacking genuine buying strength.

Other metals follow gold downward

Silver fell 1.2% to settle at $49.58 per ounce, reflecting risk appetite weakness. Platinum dropped 1% to $1,517.73, affected by declining industrial demand, especially from the automotive sector. Palladium slid 1.5% to $1,372.05, the most affected by industrial concerns.

The overall picture: all precious metals are influenced by the same mix of dollar strength and declining rate hike expectations.

The story from a long-term perspective

Yes, short-term pressures are clear and painful. But those looking beyond this week will find a very different story.

Ongoing geopolitical tensions in Ukraine and other regions keep safe-haven demand high. US debt and budget deficits push investors to seek hedging tools actively. Most importantly: central banks worldwide, especially China and Russia, continue buying gold to diversify their reserves and reduce reliance on the dollar.

These fundamental factors do not disappear because of a bearish week. The short-term decline may continue, but the long-term foundation remains strong.

What’s next?

This week will be a decisive moment for future gold price forecasts. The employment report and Fed minutes could completely change the trend or confirm ongoing pressures. Traders avoiding surprises will remain cautious until the picture becomes clearer.

Meanwhile, long-term investors may see this decline as an opportunity to add positions, especially if prices approach key support levels. Gold has not lost its appeal; it is only experiencing a temporary cold wave.