The main point I want to emphasize in this gold analysis is that the latest decline is no longer just a normal technical correction. We are seeing a combination of renewed inflation concerns, rising energy prices, a stronger US Dollar, and increasingly hawkish expectations surrounding the Federal Reserve. These factors have created a difficult environment for gold, particularly after the metal failed to maintain its recent recovery. From the fundamental side, spot gold dropped approximately 2.7% on Thursday to $3,880.93 per ounce, while US December futures settled 2.9% lower at $3,885.30. This marked the third consecutive losing session and pushed prices to their weakest levels since October 2025. In my view, the biggest catalyst behind this move was the deterioration in expectations for a Middle East peace agreement. Donald Trump's comments suggesting that Washington does not need an agreement with Iran reduced hopes of a near-term resolution, while rising oil prices brought inflation fears back into focus. Higher energy costs are particularly important because they could force the Federal Reserve to maintain restrictive monetary conditions for longer. US inflation figures have already come in above expectations, and recent comments from Fed officials have reinforced concerns that borrowing costs may remain elevated. Markets are now pricing in an 87% probability of a 25-basis-point rate increase in December, with some expectations even pointing toward a larger 50-basis-point move. This is naturally unfavorable for gold because it does not offer an interest-bearing return, making higher-yielding alternatives more attractive. There is another element worth watching: the recent liquidation of long positions. The sharp decline triggered stop-loss orders among traders who had entered during the previous recovery, adding further selling pressure. Meanwhile, uncertainty surrounding Nvidia, its leadership situation, and US semiconductor export policy has contributed to broader market concerns. Although gold can benefit from financial uncertainty, the immediate influence of the stronger dollar and higher interest-rate expectations has been considerably more powerful.
Looking at my H4 chart, I believe the technical picture has changed considerably compared with the previous recovery attempt. Gold is currently trading around $3,883.50, and what immediately catches my attention is the sequence of lower highs and lower lows that has developed since the November 9–10 area. The market attempted to stabilize several times, but buyers failed to produce a convincing reversal. The latest bearish leg pushed the price below the $4,000 psychological level and eventually toward the $3,870–$3,880 region. More importantly, the candles are still positioned beneath the red moving average and the longer-term green average, both of which are pointing downward. For me, this alignment suggests that sellers retain control of the H4 structure, and I would not consider the current sideways movement sufficient evidence of a bullish turnaround. Another detail I am paying attention to is the Ichimoku configuration. Price is trading beneath the cloud, while the forward cloud remains overhead and carries a bearish appearance. The blue and red lines are also positioned above the current market, creating additional obstacles for any recovery attempt. I would initially watch $3,901–$3,905 as the first resistance area, followed by $3,929–$3,930. A recovery through these levels could bring $3,957–$3,960 into consideration. However, the more important technical challenge is around $3,985–$4,000, where previous price activity and overhead resistance could attract renewed selling. Unless gold manages to reclaim these areas and establish H4 closes above them, I prefer treating upward movements as corrective rebounds rather than a confirmed change in direction. The momentum readings support my cautious approach. RSI(14) is sitting near 32.97, which tells me that selling pressure has become quite extended and the indicator is approaching oversold territory. Nevertheless, RSI has not yet delivered a convincing bullish divergence or crossed back above the important 50 midpoint. The MACD is also firmly below its zero line, with readings around -45.36 and -43.00. Its negative positioning reflects the strength of the prevailing downward momentum, although the histogram suggests that I should watch for any gradual reduction in selling intensity. Meanwhile, the Stochastic oscillator is hovering around 32 and 41, showing that momentum remains weak without providing a reliable bullish crossover confirmation. I would rather wait for these indicators to turn together than rely on one isolated signal. For the downside, my first area of interest is $3,873–$3,870, which represents the immediate floor visible beneath the latest consolidation. A decisive H4 close below this zone would strengthen the possibility of another bearish extension toward $3,845–$3,840. If sellers manage to break that support and maintain pressure, I would keep $3,820 and subsequently $3,800 on my radar as further downside objectives. These are potential technical targets rather than guaranteed destinations, and I would reassess the structure after each support break. The inability of buyers to defend the recent lows would be particularly important because it could encourage additional stop-loss activity among traders attempting to catch a bottom. As far as execution is concerned, I personally prefer a selling setup rather than chasing the market after such a sharp decline. My preferred scenario would be a corrective recovery toward $3,900–$3,930, followed by a clear bearish rejection on the H4 timeframe. In that case, a possible short entry would be around $3,915–$3,930, with an initial protective stop above $3,960, depending on the entry and candle structure. I would look for $3,885 as the first profit-taking area, followed by $3,870 and $3,845. A deeper move could extend toward $3,820. I would consider reducing exposure or moving the stop to protect profits once the first target is reached rather than keeping the entire position open unnecessarily. On the other hand, I am not completely ignoring the possibility of a recovery. RSI is approaching oversold territory, and after three consecutive losing sessions, short-covering could produce a noticeable bounce when trading resumes. If gold holds above $3,870 and climbs through $3,901, I would watch whether buyers can build enough momentum to challenge $3,930. A sustained H4 breakout above $3,960 would improve the recovery outlook, while a stronger move through $4,000 would be a more meaningful development. Under that alternative scenario, I would consider a cautious long position after a successful retest of the broken resistance, targeting $4,013 and then $4,041, with a protective stop below the confirmed retest low. Since today is Saturday and the forex market is closed, I would not rush into placing orders based on the final candles alone. I want to see how liquidity returns at Sunday's opening and whether the market produces a gap or immediately resumes its previous downward direction. My preferred approach is to let the first H4 candles establish a clearer trading range before committing capital. A rejection around resistance would reinforce my bearish preference, whereas a strong recovery accompanied by improving MACD and RSI readings would make me reconsider the short-term outlook. Overall, my reading remains bearish on gold, but I also recognize that the market is approaching an area where temporary buying interest could emerge. The $3,870 support zone is the level I consider most important at the beginning of the new trading week. Holding it may allow a corrective recovery, while losing it could expose the next downside levels around $3,845 and $3,820. Personally, I would rather sell a confirmed rebound than open a fresh short position directly into support. For me, the key is not simply predicting where gold will move next, but waiting for price action to confirm which side is actually gaining control.
