Gold is slowly recovering after a four-day drop, finding some support at $3,900. However, it still struggles to climb above $4,000 and remains in a bearish trend. Traders are looking at how the Sino-US trade deal may affect the market. Federal Reserve Chairman Jerome Powell’s comments about possibly not cutting rates in December have caused US Treasury yields to rise. Technical indicators show gold is trying to figure out its next move below $4,000. The Relative Strength Index (RSI) is below 50, and the Moving Average Convergence Divergence (MACD) shows weak upside momentum.

Bearish Trend Analysis

The bearish trend continues, with support at the 61.8% Fibonacci retracement level around $3,920. If this level fails, the next target will be around $3,820, with a potential retracement target at $3,795. For a stronger recovery, buyers need to push the price above $4,030. This would shift focus to the October 23 highs of $4,150 and a support area near $4,220. Silver is also actively traded, valued both as an asset and a medium of exchange. Its prices are affected by geopolitical instability, industrial demand, and the strength of the US Dollar. The overall market remains cautious due to news of a US-China trade truce, which influences gold and silver prices alike. Given gold’s recent inability to maintain the $4,000 level, derivative traders should tread carefully. The market is processing Federal Reserve comments that suggest a December rate cut is less likely, a sentiment supported by the September Consumer Price Index (CPI) report from October 15, 2025, indicating inflation stayed at 3.8%. In this context, traders may want to consider put options or short futures if gold falls below the crucial support level of $3,920. The bearish outlook is reinforced by rising bond yields; the 10-year Treasury note recently hit 4.95%, a level not sustained since the market turbulence of 2023. This increases the cost of holding gold and points to further downside targets near the October low of $3,820 and possibly to the target of $3,795. A drop below these levels would confirm that the recent recovery is just a temporary bounce.

Bullish Scenario and Silver Position

For a bullish outlook, gold would need to decisively break above the $4,030 resistance level, which has limited recent rallies. This will likely require a significant event, like a breakthrough in the stalled US-China trade negotiations from the recent Geneva talks. Traders anticipating an upswing could look into buying call options with strike prices above $4,030, aiming for a move toward $4,150. We are also keeping an eye on silver, which is influenced by both gold’s market movements and its own strong industrial demand. The Department of Energy’s Q3 2025 report noted a 15% year-over-year increase in solar panel installations, a major consumer of silver. However, silver will struggle to rally significantly if gold continues to decline. The current market is marked by a conflict between a hawkish Federal Reserve and ongoing geopolitical uncertainty. This suggests potential volatility in the coming weeks, especially with the next inflation data release approaching. Traders who are unsure of the market’s direction may consider strategies, like long straddles, that benefit from large price fluctuations. Create your live VT Markets account and start trading now.

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