Gold Digests Its Big Drop Near $4,010 as Tastylive Warns a Break of $3,900 Could Open $3,800
Gold has spent the first two sessions of the week going nowhere in particular. After falling more than 4% last week and slipping below $4,000 on Friday for the first time since mid-July, spot gold traded at $4,010.39 per ounce on Tuesday, down about 0.2% on the day. US gold futures were at $4,023.57. A sideways market after a sharp fall is common, and the levels that traders now watch show where the next move could begin.
A market catching its breath
Ilya Spivak, head of global macro at Tastylive, told market reporters that "we're seeing gold basically digest within Friday's range after the big drop last week." According to Analytics Insight, Spivak also warned that a breakthrough of $3,900 could push prices toward $3,800. His view reflects a common pattern: after a large decline, price often consolidates while traders decide whether selling has run its course.
On Monday, gold rose as high as $4,020.60 and closed at $4,016.97, according to TradingKey. Spot gold touched about $3,975 on Friday, its lowest level since July, in a week that saw a decline of more than 4%.
The technical map
Analytics Insight lists the key levels clearly. The nearest ceiling is the 9-day exponential moving average near $4,066. Above that, TradingKey sees resistance at about $4,050 and $4,100. On the downside, $4,000 is the round-number support that traders are defending, and the June low of $3,941.76 is the key floor. A decisive break below that June low could trigger a fresh correction.
The 14-period relative strength index stands at 35, just above the oversold threshold of 30. In plain terms, momentum remains weak, but the metal is not yet so stretched to the downside that a bounce is automatic. Analysts often treat readings in the 30s as a sign that selling is mature without being exhausted.
Why oil is the swing factor
Brent crude rose more than 6% last week, which revived worries that inflation will remain elevated and that the Federal Reserve will keep policy tight. That was the main force behind gold's drop. This week, oil has pulled back, with both WTI and Brent showing weekly losses above 2% so far, according to TradingKey. Investing.com reports that crude fell for a second straight session on Tuesday as diplomatic efforts to ease the US and Iran conflict offered some relief to energy markets.
When oil falls, inflation fears ease, and the case for higher-for-longer interest rates weakens. Gold usually benefits from that chain. The pullback in crude is one reason gold has stabilised above $4,000, even though the US dollar index edged up to 102.04.
What the Fed is expected to do
The Federal Reserve meets on 27 and 28 October, with a decision due on Wednesday. Markets expect the target range to stay at 3.75% to 4.00%. Investing.com reports that markets price roughly a 10% chance of a rate increase at this meeting, but that elevated energy prices keep expectations of a hike before year-end alive. A Reuters survey found that most economists expect a pause this week, although further tightening within the year is still possible.
The September PCE inflation report, the Fed's preferred gauge, arrives on Thursday 29 October and could shift expectations for December. Traders have priced a December increase at roughly 80% to 90% in recent days.
How the forecasts line up
Predictions for gold remain unusually wide. Bank of America expected the metal to fall below $4,000 and to average $4,000 in the fourth quarter, and that call has largely played out. ANZ sees gold possibly breaking $5,000 in 2027, while Tastylive's Spivak is focused on whether $3,900 holds in the coming weeks. These views are not contradictory. They cover different time horizons, and the near-term view depends on oil, the dollar and the Fed's tone on December.
What this means for physical holders
Gold is now about 28% below its January record of $5,598.58, and the metal has moved between $3,975 and $4,280 in the past three weeks. That is a wide range, and it shows why timing a purchase to the day is difficult. Buyers who hold 999 and 916 gold as a long-term store of value are generally better served by a schedule than by a price target.
Splitting a purchase into several parts across weeks reduces the risk of buying everything at a temporary high. Compare the dealer's price per gram with the live price on Trading Economics, ask how the workmanship charge is set, and confirm buyback terms before paying. Check the purity stamp and keep the receipt with the item.
The next two days bring the Fed decision and the PCE data, and both could move the price quickly. A calm Fed and softer oil would favour a hold above $4,000, while a hawkish surprise could send gold back to test the $3,941.76 June low.
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