Gold $XAU has looked pretty ugly over the past couple of days 😥

After finally managing to stabilize around 4000, gold turned sharply lower after US October CPI came in above expectations and Fed officials struck increasingly hawkish tones

It has now fallen below $4000, with an intraday low near 3950

The logic behind this decline is actually quite clear:

If inflation doesn't come down, it's hard for the Fed to pivot to easing. The market has even started betting on another rate hike in December, while the dollar and Treasury yields are both strengthening, naturally weighing on gold

I think the 4000 level is still the one to watch most closely. Gold quickly recovered after breaking below it several times before, but this rebound has been noticeably weak, with repeated attempts to reclaim 4000 lacking staying power

From a PA perspective, I currently lean toward the downtrend continuing, making a rebound toward 4000 worth watching

If gold remains unable to reclaim that level, the next step may be a retest of the previous low near 3920.