Gold prices have taken a sharp downturn, falling over 1.2% on October 29, 2026, after a brief three-day recovery. The precious metal is now hovering around the critical $4,000 level, a threshold that has provided some support in recent sessions. However, the bearish momentum threatens to break this key psychological barrier, especially following last week’s 4% sell-off. The short-term outlook remains uncertain until sellers lose control, and a more bullish shift requires clear evidence of a reversal.
The primary factor holding gold back is persistent inflation, which, despite typically boosting demand for gold as a hedge, is keeping central banks on a hawkish path. Elevated rate hike expectations are maintaining high nominal and real yields, which generally work against the zero-yielding metal. Central-bank buying, particularly from countries like China, continues to provide structural support, but it may not prevent further declines in the near term.
Gold has already dropped nearly 30% from its January 2026 peak, while silver has seen an even steeper correction of around 55%. Silver has broken below its summer lows, reaching a long-term support zone near $50, whereas gold has held above its summer low around $3,942. Despite these declines, both metals are increasingly vulnerable to a counter-trend bounce, though gold still needs a bullish trigger to turn more constructive.
Technically, gold’s outlook remains bearish until it forms a meaningful higher high. The metal has managed only two weekly gains over the past nine weeks, highlighting persistent selling pressure. A rebound would first need to clear the $4,075-$4,106 resistance zone, which was a key support area before turning into resistance. A decisive break above this zone, along with a move past the descending trend line connecting recent highs, would signal a potential shift in momentum. Until then, rallies should be treated with caution, as the path of least resistance remains downward.