From 5,600 to 4,000, is the gold bull market dead?
Last week it fell 4%, breaking below a round-number level, and everyone online was shouting, “Gold is finished.” But after going through central bank holdings data, I found a chilling truth—the ones fleeing are all leveraged traders; the ones scooping up the chips have stayed quiet.
First, the surface picture: brutal, just brutal.
From the January high of 5,580 to 4,000, it has lost 25%. Last week saw its worst weekly decline since June, and the daily moving averages are all in a bearish alignment: the 20-day MA is at 4,155 and the 50-day MA at 4,340, with the price below both. RSI has fallen to 27–35, oversold, but with no bullish divergence.
Everyone’s saying, “The gold bull market is over” and “De-dollarization is a hoax.”
Do you believe it?
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 around 5%.
The opportunity cost of holding gold is absurdly high—you can put your money in Treasuries and earn 5% risk-free, so why hold a non-yielding metal?
On top of that, September CPI came in hot at 3.7%, PPI was strong, and oil prices remain high. The market is pricing in a 75–80% chance of a rate hike in December. The dollar is firm, and gold is getting hammered.
It’s not that gold is worthless; it’s that the money tied up in gold is too expensive.
When rates ease, gold will be the first to take off.
Second: while you’re cutting your losses, central banks are quietly buying up gold.
Central banks in emerging markets—China, India, and Turkey—have continued adding to their reserves this year, buying more than 1,000 tons.
They bought above 4,000, and now it’s below 4,000. Have they bailed? No.
ETF holdings haven’t increased much during the pullback. What does that tell us?
Short-term speculative money is fleeing; long-term allocation money is waiting.
Third: the technicals are in the “test of faith” zone, but there’s no all-clear signal to buy the dip yet.
Strong support: 3,980–4,000 (round-number level + cluster of recent lows); if that breaks, watch 3,960–3,940 (July low), then 3,900.
Resistance: 4,040–4,075 (former support turned resistance), then 4,100–4,120; 4,150–4,200 is a cluster of moving averages.
Pattern: inside a descending channel. There’s been a rebound after a downside liquidity sweep, but until price gets above key moving averages, this is just a bear-market rally, not a reversal.
A 0.3–0.6% rebound on Monday would be an oversold bounce—don’t get excited.
Before the FOMC, any rebound could be a trap.
The bulls and bears face off—you decide
The bears say:
Rates at 5% make holding gold too costly
75–80% chance of a rate hike in December
Oil prices retreating, inflation expectations cooling
All moving averages are bearish; the descending channel remains intact
The bulls say:
Central banks are buying 1,000 tons, no question
A 25% drop from 5,600 is a deep enough correction
RSI is oversold; a technical rebound could come at any time
High debt + geopolitical uncertainty; the medium-term thesis remains intact
I’m bearish in the short term, bullish in the medium term.
But before the FOMC (October 28), anyone heavily positioned is a fool
Trading strategy
Before the FOMC (1–3 days):
Keep positions light or stay on the sidelines.
If you’re itching to short: sell into a rebound at 4,040–4,070, stop above 4,100, targets 4,000 → 3,980 → 3,960.
If you’re itching to go long: wait for 3,980–4,000 to hold and a hammer/engulfing candle to appear, then enter lightly; stop below 3,960, target 4,040–4,070
Event trading (FOMC + PCE):
Dovish statement → rebound to 4,100–4,150
Hawkish statement or hotter-than-expected PCE → break below 3,960, watch 3,900 or even lower
Trim or hedge positions before the decision; don’t bet your life on the direction.
Medium to long term:
Build positions in physical gold/ETFs in batches in the 3,900–4,000 range; don’t go all in.
Stop loss? The medium- to long-term view is based on central bank gold buying and de-dollarization, not one candlestick. But don’t let your position exceed 20% of your total capital.
Gold right now is like Bitcoin in March 2020—
The pandemic triggered a sell-off, and everyone said, “Safe-haven assets have failed.” Then it doubled six months later.
This time is the same:
You didn’t lose to gold; you lost to the illusion that “everyone else is selling.”
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