From 5600 to 4000—is the gold bull market dead?
Down 4% last week, breaking below a key round-number level, and the whole internet is shouting, “Gold is finished.” But after going through central bank holdings data, I found a chilling truth: it’s the leveraged players who are running. The ones scooping up the metal haven’t said a word.
First, the surface picture: brutal. Truly brutal.
Gold has fallen from its January peak of 5580 to 4000—a 25% wipeout. Last week saw its worst weekly decline since June. The daily moving averages are all aligned bearishly: the 20-day MA is at 4155 and the 50-day MA at 4340, with the price languishing below both. RSI has fallen to 27–35, indicating oversold conditions, but there’s no bullish divergence.
Everyone is saying, “The gold bull market is over” and “de-dollarization is a scam.”
Do you believe them?
First: the reason for the drop isn’t that gold has lost its appeal—it’s that interest rates are too high.
The 10-year Treasury yield is still hovering around 5%.
The opportunity cost of holding gold is absurdly high: if you can park your money in government bonds and earn 5% risk-free, why hold a metal that pays no interest?
On top of that, September CPI came in hot at 3.7%, PPI was strong, and oil prices remained high. The market is pricing in a 75–80% chance of a rate hike in December. The dollar is relatively strong, and gold is getting crushed.
It’s not that gold is worthless; it’s that the money tied up in gold is too expensive.
When rates ease, gold could be the first to take off.
Second: while you’re selling at a loss, central banks are quietly buying up gold.
Emerging-market central banks—China, India, and Turkey—have continued adding to their reserves this year, buying more than 1,000 tonnes.
They bought above 4000. Now gold is below 4000. Have they run for the exits? No.
ETF holdings haven’t increased significantly during the pullback. What does that tell us?
Short-term speculators are heading for the exits, while long-term investors are waiting.
Third: technically, gold is in a “test of faith” zone—but the starting gun for a bottom-fishing spree hasn’t fired yet.
Strong support: 3980–4000 (a key round-number level plus a cluster of recent lows). If that breaks, watch 3960–3940 (the July low), then 3900.
Resistance: 4040–4075 (former support turned resistance), followed by 4100–4120. The 4150–4200 range is crowded with moving averages.
The chart is still in a descending channel. Gold bounced after sweeping liquidity below, but until it gets back above key moving averages, this is just a bear-market rally—not a reversal.
A 0.3–0.6% rebound on Monday would just be an oversold bounce. Don’t get carried away.
Before the FOMC meeting, any rebound could be a trap.
Down 4% last week, breaking below a key round-number level, and the whole internet is shouting, “Gold is finished.” But after going through central bank holdings data, I found a chilling truth: it’s the leveraged players who are running. The ones scooping up the metal haven’t said a word.
First, the surface picture: brutal. Truly brutal.
Gold has fallen from its January peak of 5580 to 4000—a 25% wipeout. Last week saw its worst weekly decline since June. The daily moving averages are all aligned bearishly: the 20-day MA is at 4155 and the 50-day MA at 4340, with the price languishing below both. RSI has fallen to 27–35, indicating oversold conditions, but there’s no bullish divergence.
Everyone is saying, “The gold bull market is over” and “de-dollarization is a scam.”
Do you believe them?
First: the reason for the drop isn’t that gold has lost its appeal—it’s that interest rates are too high.
The 10-year Treasury yield is still hovering around 5%.
The opportunity cost of holding gold is absurdly high: if you can park your money in government bonds and earn 5% risk-free, why hold a metal that pays no interest?
On top of that, September CPI came in hot at 3.7%, PPI was strong, and oil prices remained high. The market is pricing in a 75–80% chance of a rate hike in December. The dollar is relatively strong, and gold is getting crushed.
It’s not that gold is worthless; it’s that the money tied up in gold is too expensive.
When rates ease, gold could be the first to take off.
Second: while you’re selling at a loss, central banks are quietly buying up gold.
Emerging-market central banks—China, India, and Turkey—have continued adding to their reserves this year, buying more than 1,000 tonnes.
They bought above 4000. Now gold is below 4000. Have they run for the exits? No.
ETF holdings haven’t increased significantly during the pullback. What does that tell us?
Short-term speculators are heading for the exits, while long-term investors are waiting.
Third: technically, gold is in a “test of faith” zone—but the starting gun for a bottom-fishing spree hasn’t fired yet.
Strong support: 3980–4000 (a key round-number level plus a cluster of recent lows). If that breaks, watch 3960–3940 (the July low), then 3900.
Resistance: 4040–4075 (former support turned resistance), followed by 4100–4120. The 4150–4200 range is crowded with moving averages.
The chart is still in a descending channel. Gold bounced after sweeping liquidity below, but until it gets back above key moving averages, this is just a bear-market rally—not a reversal.
A 0.3–0.6% rebound on Monday would just be an oversold bounce. Don’t get carried away.
Before the FOMC meeting, any rebound could be a trap.
