Gold’s latest rebound ran into the same obstacle that has troubled it for weeks: inflation is keeping another Fed rate increase on investors’ radar.
The metal briefly regained ground after its Oct. 23 low. By Friday morning, however, that recovery had given way to fresh selling. For buyers considering the pullback, the next opportunity depends on evidence that gold can hold a recovery through another test.
The Bounce Lost Its Footing
It was a volatile week for gold:
● Spot gold touched $3,975 on Oct. 23.
● By Oct. 26, it reached $4,020.60 at 2:09 p.m. Eastern, Reuters reported.
● By Oct. 29 at the same time of day, spot gold was $4,008.76.
● On Oct. 30 at 8:43 a.m. Eastern, it stood at $3,956.09, below the prior week’s low.
These show the rebound failed to hold, but they do not establish where lasting support will form.
Our earlier review stressed that a bounce needed follow-through. The latest move makes that test more demanding: buyers must first regain lost ground, then defend it.
Why The Fed's Pause Wasn't Enough
The Fed held rates steady on Oct. 28, but the data that followed gave investors little reason to dismiss further tightening. September’s PCE price index rose 0.5% from August, with core prices up 0.3%. Third-quarter GDP expanded at a 3.4% annual rate.
That combination left markets weighing persistent inflation against resilient growth. Rising oil prices added to the concern.
Gold can attract demand during inflation shocks, yet the expected policy response can create short-term price pressure. The useful question is which force dominates trading, rather than whether inflation should automatically lift bullion.
What Would Put Buyers Back In Control?
The first reference is $3,975, the Oct. 23 low that Friday’s quote undercut. Recovering it would repair some damage; holding above it through another bout of selling would be more persuasive.
Beyond that, $4,020.60 marks an observed point in the earlier rebound. Regaining it and holding into another session would strengthen the recovery case. Neither figure is proven support or resistance.
Fresh lows followed by another failed recovery would weaken the argument that selling is running out of steam.
This week’s labor and business surveys offer the next tests. Cooler price pressure and easing yields could help buyers, while renewed inflation concerns could prolong the pullback.
Patient gold bulls don't need to predict the exact bottom. A recovery that survives bad news would offer stronger evidence than a brief bounce after a sharp fall.
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byUnited States Gold Bureau