Gold market analysis

"Gold Price Must Rise Above 4210 to Be Optimistic" 28/10/2025 9:57 Completed 

Gold prices finally broke through the $4,000 mark. Before the close of the London market yesterday, they dropped to a low of $3,971.92 an hour before the close. They then rebounded to a high of $4,010.24, which was exactly at the 90-degree vertical angle of Gann, and thus were clearly blocked and fell back. This morning in the Asian market, they dropped to a low of $3,973.9 before climbing again. The current high is $4,019.71, slightly breaking through the 20SMA (4,019.2) on the hourly chart. However, there is significant selling pressure near this line, and after a period of sideways movement at the high, they resumed their downward trend. 

Short-term rebounds face numerous obstacles. 

Last Friday, I expected that Monday would be the reversal day for gold prices. I originally anticipated that it would remain above the $4,000 mark with a slightly weak trend and then rise due to expectations of the Federal Reserve cutting interest rates. However, gold prices broke through the $4,000 mark yesterday. As this was the level that gold prices had held firm at during multiple adjustments after reaching a new high, yesterday's breach indicates that a new trend has begun. This morning's attempt to challenge the 20SMA on the hourly chart was unsuccessful, reflecting that the weakness in gold prices remains. Even if gold prices break above this line, they will face greater resistance, first at the 20-day SMA ($4,072), then at the 135-degree angle of Gann's grid at $4,110, and the neckline of the double top on the hourly chart at $4,186. Only by breaking through the 180-degree angle of Gann's grid at $4,210 and holding above this level can there be hope for further gains in the future. Whether it can reach a new high is another matter. 

A break below the 20-hour SMA could see 4055. 

In the short term, the gold price seems to have formed a small double bottom on the hourly chart. If the neckline is set at $4,010.24, the measured upside target would be $4,048.76, which is close to the 50% retracement level of the biggest decline since last night's sharp drop at $4,055.12. Therefore, the first major resistance for the short-term rebound would be this level, provided that the gold price breaks above the 20-hour SMA. It should be noted that if the gold price has already turned downward, a 25 basis point interest rate cut by the Federal Reserve will not generate a new round of upward momentum for the gold price. Instead, it is highly likely that the gold price will fall below $4,000 again due to the Fed's concerns over rising inflation and make a deeper adjustment. The initial target is the mid-point of the biggest increase since August 20 at $3,846.44. 

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

MTF Special Analyst Zheng Guangfu