Gold (XAUUSD) Price Forecast: Bearish Pressure Builds as Traders Eye Value Zone at $3846.50–$3771.46

Gold Price Drops Below $4100 as Trade Hopes and Fed Meeting Weigh on Safe-Haven Demand

Spot gold (XAU/USD) slid nearly 2% on Monday, breaking minor support at $4100.43 and extending last week’s pullback. The move marks the fourth straight session where resistance at $4162.93 and $4192.86 capped upside attempts, reinforcing a short-term bearish bias heading into a key week for monetary policy.

At 10:57 GMT, XAUUSD is trading $4037.47, down $76.65 or -1.86%.

Gold Falls as US-China Trade Optimism Boosts Risk Appetite

Monday’s selloff followed fresh signs of progress in U.S.-China trade talks, dampening demand for traditional safe-haven assets like gold. Risk sentiment improved after U.S. President Donald Trump said both sides are “set to come away with” a deal, building on weekend negotiations that laid groundwork for a potential agreement during the upcoming South Korea summit with Chinese President Xi Jinping.

Asian equities rallied on the headlines, underscoring a shift toward risk-on positioning just days ahead of the Federal Reserve’s rate decision. The market is fully pricing in a 25-basis-point rate cut on Wednesday, but traders are focused on Fed Chair Jerome Powell’s forward guidance.

UBS analyst Giovanni Staunovo noted that while easing trade tensions reduce safe-haven demand, the prospect of lower tariffs gives the Fed more room to cut rates — a medium-term positive for gold. “Lower real interest rates should still support demand,” Staunovo added, though he expects limited price action if the Fed sticks to the expected 25-bps cut.

Key Technical Zone Below $4000 in Focus

With $4100.43 giving way, the next downside level in play is last week’s low at $4004.28. A break below that would open the door to the October 9 swing bottom at $3944.43, followed by the long-term 50% retracement level at $3846.50 — the start of a critical support zone that extends to the 50-day moving average at $3771.46.

This $3846.50–$3771.46 zone is seen as the best risk-reward area for dip buyers to re-enter.

On the upside, bulls would need a close above $4192.86 to regain control. That level has held for four straight sessions and remains the key trigger for any potential push toward the October 20 all-time high of $4381.44.

Gold Price Forecast: Bearish Bias Until $3846.50–$3771.46 is Tested

Short-term sentiment favors further downside with sellers likely to stay active below $4100.43. Unless gold reclaims $4192.86, momentum points to a grind lower toward the $3846.50–$3771.46 value zone, where stronger demand is expected to emerge. Traders will also be watching for any dovish surprises from Powell that could shift the tone later this week.

More Information in our Economic Calendar.