Gold Shines Again After Nearly a Month in the Shadows
As of writing, spot gold ($4,104) has gained $102 from last Friday’s close, marking a +2.56% daily increase—its strongest performance since mid-October (Friday the 17th, for the superstitious), when a correction began that saw the precious metal drop from the $4,380 area by as much as 11.5%, reaching a relative low of $3,886 on October 28 before establishing a short-term floor around $3,935.
The news of a potential agreement between Democrats and Republicans to end the U.S. government shutdown, now lasting over a month, has sent a clear signal to markets: public spending and fiscal deficits are once again poised to receive bipartisan support. This shift is fueling not only gold but also broader risk assets. Analysts at major banks such as JPMorgan have dubbed the recent rally a “debasement trade”, referring to the depreciation of fiat currencies—particularly the U.S. dollar—caused by continuous debt expansion, which in turn has driven gains across gold, Bitcoin, and other risk assets.
The days of a strong negative correlation between gold and real interest rates now seem distant. Central bank purchases throughout 2023–2024 have triggered a broader wave of accumulation, sustaining the bullish momentum.
TECHNICAL ANALYSIS
From a long-term perspective, gold ($4,104) initiated a clear and powerful uptrend in late 2023 from the $1,800 level, moving within a well-defined channel that supported medium-term advances of roughly 20%. After reaching the $3,300 area in April 2025, gold consolidated for four months in a range capped near $3,445 before breaking out sharply at the end of August. This breakout evolved into a parabolic move, pushing prices above the channel and to an all-time high of $4,381.40 on October 20, 2025, amid extreme overbought conditions (RSI > 87). In the final phase of this surge, daily price swings exceeding $150 became commonplace—an indicator of elevated volatility.
On October 27, the steepest ascending trendline within the broader channel—originating at $3,310 on August 20—was broken to the downside, though the price held relatively well. The $3,450 level, previously tested in early October, acted as solid support. The RSI reset to 50 and has since turned decisively higher.
The $4,080–$4,150 range now represents a key resistance zone to watch, with a potential retest from the downside of the prior uptrend line likely occurring around $4,250. A break below $4,080 would shift attention to $4,030 (with minor support near $4,045). A decisive breach there could push gold back into the previous range, with a lower boundary around $3,930 and an intermediate stop near $3,970.
From a broader perspective, gold appears fairly valued at current levels. While we do not expect substantial gains in the weeks remaining before year-end, the upward momentum and elevated volatility seen in recent months leave room for a possible retest of this year’s highs.
