Gold (XAU/USD) Price Slips 1.5% as $4000/oz Handle Remains Elusive. What Comes Next?

[Ben Graham]

Gold prices saw a sharp decline in the US session today with the precious metal down around 1.5%. Gold tested the $4000/oz in the European session but failed to break higher as the rally ran out of steam.

The current resurgence in the US dollar which accelerated following a hawkish recalibration of market expectations regarding the Federal Reserve’s (Fed) monetary policy has played a big part in the precious metals struggles.

Fundamental Catalysts: The Fed Repricing Shock and USD Strength

After last week's Fed meeting, officials made it clear they are less likely to cut rates soon. The market's confidence in a rate cut this December quickly fell from 94% to about 70%.

This expectation of higher-for-longer interest rates makes it more expensive to hold gold, which doesn't pay interest, compared to holding the interest-earning US dollar, pushing the gold price (XAU/USD) down. Key Fed leaders have also confirmed this view; some said inflation is still too high and they're ready to raise rates if needed, while another expressed concern about cutting too soon.

These signals strengthen the US dollar, which is hurting gold. If the US Dollar Index (DXY) keeps rising strongly above the 100 mark, it would be a major sign that dollar strength is here to stay, likely causing precious metals prices to drop significantly.

Adding a small, secondary pressure, a new tax policy in China that removes some exemptions on gold purchases is expected to temporarily reduce how much gold Chinese consumers buy.

US Government Shutdown Continues

The recent Fed rhetoric suggests a greater dependency on data moving forward. This is of course inconvenient given the ongoing US government shutdown which is disrupting the normal release of economic reports, which means we have less information than usual.

Because of this limited data, the few reports that do come out, especially tomorrow's job report from ADP, will likely have a much bigger impact on the markets than they normally would. The overall lack of data may also lead to periods where currency trading lacks a clear direction.

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Technical Analysis - Gold (XAU/USD)

From a technical standpoint, Gold needs a four-hour candle close below the 3924 handle for a new lower low to be printed.

The current highest-probability trend is a continued decline toward the 3782 to 3797 target range, contingent upon Gold remaining beneath the 4000 psychological level.

For the bullish bias to be revived in the near term, XAU/USD must achieve a four-hour candle close above the 4000 psychological level and the 50-day MA at around the 4012 handle.

Until such a reversal is confirmed, pressure will persist. It is important to note that while the intermediate trend is negative, the long-term uptrend remains underpinned by the 50-day and 100-day MA on the daily timeframe, which rests at 3844 and 3595 respectively.

Gold (XAU/USD) Four-Hour Chart, November 4, 2025

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Source: TradingView (click to enlarge)

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