The Price of Gold Continues Sliding. Investors Should Monitor These Critical Levels
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News Summary
Gold prices accelerated their retreat from recent record highs on October 28, 2025, driven by profit-taking after strong gains over several months. The spot price of gold slipped below $3,900/oz as optimism surrounding a potential breakthrough in U.S.-China trade talks, ahead of a meeting between President Donald Trump and Chinese President Xi Jinping, eased demand for the safe-haven asset. This decline coincides with a rallying stock market hitting record highs, yet gold remains approximately 50% higher year-to-date. Technical analysis indicates that gold's Relative Strength Index has dropped below its neutral threshold, signaling weakening bullish momentum and the potential for a deeper short-term pullback. The article highlights three critical support levels for investors to watch: $3,850 (aligning with the 50% Fibonacci retracement level and 50-day moving average), $3,720 (near the 61.8% Fibonacci retracement level), and $3,450 (identified as a potential accumulation area). Concurrently, investors should monitor the key overhead resistance region near $4,380, as a sustained breakout above this level would signal renewed bullish momentum.
Background
After reaching an all-time high on October 20, 2025, gold prices are currently undergoing a retracement. Despite the recent dip, gold is still approximately 50% higher year-to-date, boosted by persistent economic uncertainties, geopolitical tensions, and ongoing purchases by central banks worldwide. This gold pullback coincides with upcoming high-level trade talks between President Donald Trump's administration and China, where market optimism for a potential breakthrough is easing demand for traditional safe-haven assets like gold.
In-Depth AI Insights
What are the deeper implications of a potential breakthrough in US-China trade talks under the Trump administration for gold's long-term positioning as a safe-haven asset? - Superficial positive trade news typically diminishes gold's safe-haven appeal temporarily as market risk sentiment improves. - However, under Trump's second term, the durability and stability of any trade agreement might be questioned, with investors recalling past fluctuations and uncertainties. This suggests that gold's safe-haven demand might only be temporarily abated, with potential long-term underlying support. - Furthermore, US trade policy, within the context of strategic competition, may increasingly serve national security and technological hegemony objectives rather than purely economic interests, which could continue to underpin gold at a geopolitical level. Despite its recent pullback, gold is up a significant 50% year-to-date. What persistent underlying macroeconomic or geopolitical risks does this reflect for investors? - Continued central bank purchases signal sovereign nations' long-term concerns over dollar hegemony and global financial system stability, alongside a strategic pursuit of reserve diversification. - Persistent inflation concerns and currency debasement expectations, especially with elevated debt levels in major global economies, drive investors to view gold as a store of value. - The ongoing fragmentation of the global geopolitical landscape and escalating conflicts lead to a proliferation of regional instabilities and uncertainties, reinforcing gold's status as the ultimate safe haven, which short-term trade positives can hardly fully offset. How does the simultaneous occurrence of gold's retreat and a record-breaking stock market rally inform investor capital allocation strategies in late 2025? - This could indicate a short-term rebound in risk appetite as the market seeks a