By Sophie Lindqvist

Gold’s bearish trend remains intact after a rebound to 4,150 gave way to a fall below 3,870, its lowest level in more than a year. Gold, quoted against the US dollar under XAUUSD, edged higher after that drop.

What changed the gold outlook?

“The new low indicates that the downtrend remains intact,” said Krisada Yoonaisil, Financial Markets Strategist at Exness. “The rebound is merely a short-term rally within a major downtrend.”

The sequence gives the recovery limited evidentiary weight. A low not seen for more than a year, viewed alongside lower technical swings, supports that cautious interpretation.

What is driving the pressure?

The US October Consumer Price Index (CPI) rose 0.4% month on month, exceeding the 0.3% consensus expectation. That upside surprise reinforced expectations of further Federal Reserve (US central bank) tightening. Higher oil prices added to inflation risk, while Fed officials struck a broadly hawkish tone, meaning they favoured tighter monetary policy.

The bearish logic runs through rates and currencies: above-forecast inflation supports tighter-policy expectations; elevated Treasury yields, meaning returns on US government debt, and a stronger US dollar then weigh on gold. The source does not quantify the dollar move or the yield level, nor identify an oil benchmark. Investors therefore cannot judge the relative force of those drivers.

A rebound driven by bargain hunting provided temporary relief. Bargain hunting means buying prompted by a price decline. It did not overturn the downtrend assessment, according to Yoonaisil.

What could test the inflation thesis?

US Producer Price Index (PPI) data are the next stated test of the inflation trend. Markets await the release, although the analysis provides no forecast, release date or benchmark reading. Because no threshold accompanies that test, traders cannot use the source to determine how strong a PPI surprise must be.

Geopolitical tensions could also pressure gold if they fuel energy-driven inflation. The analysis does not quantify that risk or identify a specific conflict, so investors cannot attach a firm probability to it. Its stated mechanism is the inflation channel, which could reinforce the monetary-policy pressure already weighing on gold.

Where are the decisive technical levels?

Price formed lower swings beneath diverging bearish exponential moving averages (EMAs, smoothed price-trend indicators), indicating strengthening bearish momentum. Support marks a price area where buying may emerge; resistance marks one where selling may increase.

• 4,150: The rebound peak reached before gold fell below its lowest level in more than a year.
• 3,970: The resistance level any rebound may encounter before the decline resumes.
• 3,870: The recent low and key downside trigger. A renewed break below it could keep the decline scenario active.
• 3,700: The next support if 3,870 fails.
• 3,440: The subsequent support level if 3,700 also fails.

These are conditional chart markers, not price promises. The analysis gives no timeframe, probability estimate or stop-loss framework for any target. It also omits the EMA periods and identifies October CPI without a year. Those gaps limit precise verification and reproduction of the technical signal.

What does this change for gold traders?

The practical change is a bearish trading bias, not certainty: rallies remain vulnerable while the broader downtrend persists. The immediate read is to monitor 3,970 as the rebound hurdle and 3,870 as the downside trigger; 3,700 and 3,440 define the contingent path lower. Each step depends on price confirmation and should not be treated as inevitable.

Confirmation still depends on inflation evidence and price behavior. A sustained move above 3,970 would challenge the immediate decline scenario, although the source sets no upside target. A break below 3,870 would strengthen the case for 3,700 and 3,440. In the absence of those confirmations, the evidence supports conditional analysis rather than an unconditional position.