Gold – bears regain control and eye key $4000 support

Gold fell to two-week low on Thursday on repeated attempt through $4100 support, as oil prices climb further on signals of escalation of the conflict in the Middle East.

Rising inflation (the latest US data showed that CPI & PPI remain in an upward trajectory, implying that the Fed would keep interest rates elevated for extended period) will continue to support dollar.

The Fed meets next week, with wide expectations for a hawkish hold scenario on Oct 28 policy meeting, while release of US September PCE Price Index (Fed’s preferred gauge for underlying inflation) on Oct 29, expected to contribute to the central bank’s monetary policy direction.

Another violation of $4100 pivot firms negative near-term structure, with eventual close below this level to confirm strong bearish signal for attack at key $4000 support zone (including spike lows at $3942 and $3960).

Broken $4100 level reverted to initial resistance, followed by broken Fibo at $4120 and falling 20DMA ($4152) which tracks the downtrend since early September and marks the first upper breakpoint.

Res: 4100; 4120; 4152; 4190
Sup: 4021; 4000; 3960; 3942