Gold market analysis

"Gold Price at $4,000 Will Surely Fall" 22/10/2025 10:10 Completed 

The major adjustment of gold prices kicked off this week. Although the low point reached in the early Asian session today was $4,004.34, which is close to the double top measurement decline target of $3,991.38 I pointed out yesterday, when all investors saw that the gold price dropped by more than $200 in a single day yesterday, even those who were pretending not to notice couldn't help but take action. 

This morning, the gold price rebounded to a high of $4,120.38 before falling again. At the time of writing, it was still holding above $4,100. The sharp drop in the gold price has caused the 9RSI on the daily chart to fall to 52, but it is still above 95 on the monthly chart. This shows that the adjustment in the gold price is far from over. Technically speaking, the gold price could fall close to the measured decline target of the double top on the hourly chart and then rebound sharply. Logically, this wave should be able to challenge the neckline at $4,186, and only if it fails to break through will it fall back again. 

However, in the past long period, a large amount of funds have flooded into the gold market. The sharp decline this week is likely caused by a large amount of funds flowing out of the gold market. Does this still need to prove that the gold price is weakening? Therefore, I think that if the major players are determined to test the resistance level, they should directly challenge the 4400 mark. But then again, why didn't the gold price break through this level when it approached 4400 dollars from last Friday to the beginning of this week? Has this round of adjustment already digested the accumulated selling pressure over the past long period? 

Gold prices are expected to fall to 3,505 before stabilizing. 

The question to consider now is whether, after the gold price breaks through a positive thousand-digit mark, it can always hold that level without breaking it and move on to the next thousand-digit mark. The trend since 2008 shows that the answer is no, although the extent of the adjustment varies. Only in March this year, after breaking through the $3,000 mark, did the price only fall back to $2,956.6 in April before climbing again. In other words, it is a hundred percent certain that the gold price will fall below $4,000 in November! 

As for the extent of the adjustment, excluding the two extreme cases, namely the decline in 2008 and the period from 2011 to 2015, as well as the drops in April and May this year, the adjustment is generally around 20% (the market generally considers a 20% drop from the peak as a bear market). Therefore, if the current historical high of $4,381.42 is adjusted by 20%, the gold price will fall by $876.28 to $3,505 before it is expected to stabilize. 

$4,186 is the maximum rebound target. 

In the short term, gold prices rebounded to $4,120 this morning but were blocked and fell back. The $4,110 level is at the 135-degree angle of Gann's theory, which is considered a relatively weak resistance point. Therefore, be cautious that gold prices may further challenge the $4,210 level at the 180-degree angle before making a significant adjustment again. However, if $4,110 does prove to be a resistance, gold prices will again test the $4,010 level at the 90-degree vertical angle. A break below this will see a test of the $3,910 level at the 45-degree angle, and another break will see a test of the $3,810 level at the horizontal line. The $3,505 level mentioned earlier, which represents a 20% decline, is close to the $3,510 level at the 135-degree angle. The maximum acceptable rebound target for now remains the double top neckline at $4,186 on the hourly chart. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu