Gold’s Correction Deepens: 3.8% Intraday Swing Signals Stabilization Efforts
Key Takeaways
- Gold’s 3.8% intraday swing from $4,161 to $4,004 extends an 8% correction from highs,
- U.S.-China trade optimism drives risk-on flows away from gold,
- $4,000 support holds as RSI signals oversold,
- long-term bull case intact with $5,000+ forecasts by 2026.
Gold’s Correction Deepens: 3.8% Intraday Swing Signals Stabilization Efforts
Spot gold extended its volatile correction on October 22, 2025, trading in a wide intraday range from a high of $4,161 to a low of $4,004—a 3.8% decline—before recovering modestly to hover above $4,050 in late-session action. Building on yesterday’s historic 6.3% plunge from the all-time high of $4,381, this session’s action reflects ongoing profit-taking after a 60% year-to-date rally, with prices now down over 8% from peak levels and erasing more than $2 trillion in market value. 20 21
Fundamental Drivers: Profit-Taking Dominates Amid Easing Tensions
Key Bearish Pressures:
U.S.-China Trade Optimism and Trump’s Remarks: President Trump’s comments that a “full-scale” 100% tariff on China would be unsustainable have fueled hopes for de-escalation, reigniting risk-on flows and reducing gold’s safe-haven appeal. Upcoming U.S.-China talks, including a potential Trump-Xi meeting, add to the bullish equity sentiment. 14 17
Resurgent U.S. Dollar and Yields: The DXY index climbed amid rebounding Treasury yields, making gold pricier for international buyers and amplifying the sell-off. This dynamic has overshadowed earlier Fed rate-cut expectations. 12 0
Post-Rally Profit Booking: Investors are locking in gains ahead of key U.S. inflation data this week and Diwali demand in India, where local prices have softened to around Rs 11,660 per gram for 22-karat gold. The metals sector, including a 7-8% drop in silver, is undergoing a broad reset. 0 15
Long-Term Outlook Remains Bullish: Despite the pullback, structural supports like central bank buying, geopolitical risks (e.g., ongoing U.S. government shutdown), and forecasts from HSBC ($3,455 average for 2025, up to $5,000 in 2026) and BofA ($5,000 by 2026) suggest this dip could be a buying opportunity. UBS projects gold ETF holdings to exceed 3,900 metric tons by year-end. 9 11
Technical Analysis: Range-Bound with Downside Bias
The session’s 3.8% range highlights exhaustion in the sell-off, with the recovery above $4,050 indicating tentative dip-buying near oversold levels (RSI below 30). However, the short-term uptrend from mid-October remains fractured, with prior supports now resistance.
Immediate Resistance: $4,100–$4,150. This flipped zone from yesterday’s action could cap rebounds; a decisive break above might signal stabilization.
Critical Support: $4,000 psychological level, aligning with the intraday low probe. A hold here could foster consolidation, but failure risks a deeper test toward $3,900 (September lows).
Scenario Outlook:
Base Case: Volatile Consolidation
Target: $4,020–$4,080 range.
With selling momentum waning and RSI oversold, expect choppy trading as traders digest profits and await U.S. CPI data. Dip-buyers may defend $4,000, but risk-on flows keep upside limited without negative trade headlines. 3Bearish Extension
Target: $3,900–$4,000.
If DXY pushes higher or trade talks disappoint bulls, a break below $4,000 could accelerate the correction, resetting overbought conditions from the rally. This aligns with forecasts of a near-term pullback before resuming uptrend. 11Bullish Reversal
Target: $4,200 retest.
A risk-off catalyst—like stalled U.S.-China progress or renewed shutdown fears—could spark a snap-back, trapping shorts. Volume spikes and a DXY pullback would confirm. 18
Key Takeaways:
Gold’s 3.8% intraday swing from $4,161 to $4,004 extends the post-peak correction, with prices now 8% off highs amid $2T+ in value erased. 21
Easing U.S.-China tensions and Trump’s tariff backpedal drive risk-on sentiment, sidelining safe-haven bids despite long-term bullish forecasts. 14
Technical exhaustion near $4,000 support offers stabilization potential, but DXY strength caps rebounds without fresh catalysts.
Investors should view this as a tactical dip in a structurally upward trend, eyeing ETF inflows and CPI for directional cues. 11
Final Word
October 22’s range underscores gold’s headline sensitivity, with the bounce above $4,050 providing breathing room after two days of turmoil. Traders: Tighten stops around $4,000 and monitor U.S. data releases closely. Long-term holders: This reset reinforces the multi-year bull case—patience may reward as forecasts point to $5,000+ by 2026. Keep an eye on trade headlines for the next pivot.
