Gold prices have fallen for three consecutive days, dropping over 4% this week. New trade agreements between the U.S. and Asia are increasing investor confidence, impacting gold prices. The metal hit a three-week low of $3,886 before bouncing back above $3,900.

Impact Of Trade Agreements

A U.S.-Japan deal on rare earth supplies is boosting risk appetite. Attention is on the upcoming Trump-Xi summit and U.S.-China talks. Signs of easing tensions are raising hopes to avoid a trade war. Current technical analysis shows a bearish trend as gold corrects from its all-time highs. If gold fails to regain support at $4,010, it confirms a downward trend. Prices are testing near $3,920, which is the 61.8% Fibonacci retracement from a recent bull run. If prices continue to decline, they might target the range of $3,795 to $3,830. Any attempts to rise may face resistance around $4,010 and $4,150, with past support at $4,185 limiting potential rallies. FAQs outline gold’s role as a store of value and an inflation hedge. Central banks are major holders, having acquired 1,136 tonnes worth $70 billion in 2022. Gold typically moves inversely to the U.S. Dollar and is influenced by geopolitical and economic factors, especially interest rates and USD performance.

Market Dynamics And Expectations

As of October 28, 2025, market sentiment is shifting away from safe-haven assets. Optimism about new U.S.-Asia trade deals is encouraging investors to take on more risk, putting pressure on gold. The price dropping below the crucial $4,010 level confirms this bearish trend for now. Derivative traders should consider strategies that benefit from potential further declines or increased volatility. The next key target area seems to be between $3,795 and $3,830, aligning with significant technical retracement levels. This perspective is backed by the U.S. Dollar’s strength, with the Dollar Index (DXY) recently trading above 112—something we haven’t consistently seen since the aggressive rate hikes of 2022. The upcoming summit between Presidents Trump and Xi could lead to notable market fluctuations. A positive outcome might accelerate gold’s decline, while any breakdown in talks could cause a swift price reversal. This scenario suggests that options strategies could serve as a hedge against sudden price spikes, as implied volatility may rise leading up to the summit. This risk-on environment extends beyond gold, as the S&P 500 has gained over 3% in October, moving toward new highs and diverting capital from non-yielding assets like gold. Data from the World Gold Council for Q3 2025 shows that central banks are still net buyers but at a slower pace compared to record purchases in 2022 and 2023. This continued support is insufficient to combat the current short-term selling pressure. For those holding bearish positions, monitoring the $4,010 level is crucial, as it serves as a key resistance point. A sustained move above this price could indicate that the current downward trend is weakening. The next significant resistance level is around $4,150, and breaking above this would invalidate the immediate bearish outlook. Create your live VT Markets account and start trading now.

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