Gold broke below $4,000 even as the dollar and Treasury yields declined. The source points to possible Wall Street liquidation and fading oil prices as pressure, while technical indicators suggest the downtrend may continue.
Gold fell sharply on Friday, dropping below the round figure of $4,000 while the dollar and Treasury yields pulled back. Investing.com suggests traders may have sold long holdings to cover margin calls on Wall Street after turbulence tied to worries about heavy AI-related spending and borrowing by big tech firms.
Oil and Hormuz weigh on sentiment
Oil prices also fell on optimism about US-Iran diplomatic talks, which did not help the metal. The analysis suggests traders may want to see the Strait of Hormuz actually reopen before they buy gold again. Until then, worries that inflation stays elevated could linger.
Technical picture points lower
After the drop below $4,000, gold hit support around $3,870 and rebounded somewhat. But the metal is back under pressure today, which suggests the downtrend may have more room to run.
The RSI sits slightly above 30 and is turning south again, while the MACD is below both its zero and trigger lines. Both readings support the bearish view.
If bears push below the $3,870 zone, the decline may extend toward $3,715, support marked by the low of September 24, 2025. The $3,630 area may come into play after that.
On the upside, a recovery above $4,100 could raise the prospect of a bullish reversal, since it would break the downtrend line and mark a higher high on the daily chart. Bulls may then feel confident climbing toward $4,200 or $4,260.
Source: Investing.com
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