Gold prices are facing renewed pressure as rising crude oil prices, geopolitical uncertainty and changing expectations around global monetary policy weigh on the precious metal. Spot gold dropped sharply on October 22, 2026, breaking below an important support level and recording its lowest price since August 3.
According to Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, the near-term outlook for gold remains challenging. However, he has cautioned traders against aggressive selling at current levels without a strict stop-loss, given the possibility of sharp price swings.
The key technical levels to monitor are resistance at $4,140 and $4,227, while immediate support is placed at $4,000 and $3,930. A decisive break below $4,000 could expose gold to further downside pressure.
Gold Prices Break Below Key Support Level
Spot gold prices fell below the $4,100 mark on October 22 as rising crude oil prices triggered selling pressure. The metal subsequently breached the important $4,066 support level, moving below its October trading range of approximately $4,066–$4,226.
By Thursday night, spot gold was trading around $4,037 per ounce, down approximately 2.5% for the day. The sharp decline reflected a combination of momentum-driven selling, concerns about higher energy costs and a firmer US dollar later in the trading session.
The breakdown below $4,066 represents a significant technical development because the level had previously acted as support during October. When a market falls below an established support zone, some traders may interpret it as a bearish signal, potentially encouraging additional selling.
Nevertheless, price movements can become volatile after a sharp decline. Traders therefore need to watch whether gold stabilises around $4,000 or continues towards the next support level at $3,930.
Rising Crude Oil Prices Put Pressure on Gold
The increase in crude oil prices has emerged as one of the major factors influencing gold's recent weakness.
Brent crude oil futures climbed to $112.68 per barrel on October 22, their highest level since May, after rising more than 3% during the session. Concerns about escalating tensions between the United States and Iran contributed to the rally.
US President Donald Trump's remarks denying talks with Iran reduced expectations of a near-term agreement, while a drone attack on Saudi Aramco's Shaybah oil field on October 21 added to concerns about potential supply disruptions.
Although oil flows through the Middle East had recovered above pre-war levels, uncertainty surrounding regional tensions, supply routes and available emergency reserves continued to support crude prices.
Higher oil prices can complicate the inflation outlook by increasing energy and transportation costs. If inflation remains persistent, central banks may have less flexibility to reduce interest rates and could maintain restrictive monetary policies for longer.
This environment can weigh on gold, which does not generate interest income. When investors expect interest rates to remain elevated, interest-bearing assets may become relatively more attractive.
However, geopolitical uncertainty can also increase demand for gold as a safe-haven asset. The metal's reaction will therefore depend on whether investors place greater emphasis on inflation and interest-rate risks or on demand for protection against geopolitical instability.
US Dollar and Bond Yields Remain Important Factors
Movements in the US dollar and Treasury yields continue to influence gold prices.
The US Dollar Index had been consolidating around the 101.50–102 range after reaching 102.95 on October 14 following stronger-than-expected US inflation data. It was around 101.87 at the time of the analyst's assessment.
The dollar strengthened later during the October 22 session, adding to the pressure on gold. Because gold is priced internationally in US dollars, a stronger dollar can make the metal more expensive for buyers using other currencies, potentially limiting demand.
At the same time, US bond yields declined during the session. The two-year Treasury yield was reported at 4.69%, while the 10-year yield stood at approximately 5.01%.
Lower yields can support gold by reducing the opportunity cost of holding a non-interest-bearing asset. However, this support was insufficient to prevent the metal's sharp decline as oil prices rose and the dollar strengthened.
The divergence between falling yields and falling gold prices suggests that energy-market developments and technical selling were important drivers of the session's movement.
US Economic Data and Federal Reserve Policy in Focus
Investors are also assessing economic indicators ahead of the US Federal Reserve's monetary policy announcement scheduled for October 28.
Recent US housing figures have been disappointing. The National Association of Home Builders' Housing Market Index fell from 32 in September to 29 in October, its lowest reading since 2012.
Housing starts declined from 1.288 million in August to 1.221 million in September, below the forecast of 1.305 million. Pending home sales also fell 7.3% month-on-month, significantly worse than expectations.
These figures point to weakness in parts of the US housing market, although employment indicators have continued to suggest a relatively stable labour market.
According to the assessment provided by the analyst, traders were assigning only a 7% probability to a Federal Reserve rate hike at the October 28 meeting. Investors were nevertheless watching the central bank's communication for clues about its future policy direction.
The possibility of a rate increase later in the year remained an important consideration for financial markets.
For gold, the outlook will depend on how policymakers balance inflation concerns against signs of economic weakness. A more restrictive policy outlook could limit recovery attempts, while lower rate expectations could provide support.
Gold ETF Inflows Offer a Positive Signal
Despite the recent decline in prices, investment demand through gold exchange-traded funds (ETFs) has remained encouraging.
Global gold ETF holdings rose to approximately 101.55 million troy ounces, their highest level since July 2022. ETFs recorded net inflows of around 0.68 million ounces during October, according to the data cited in the analyst's assessment.
Year-to-date holdings had increased by approximately 2.60 million ounces, equivalent to around 81 tonnes. Holdings had also risen by approximately 0.63 million ounces, or 20 tonnes, since the beginning of the Iran war on February 28.
These inflows suggest that some investors continue to view gold as an important portfolio diversification and risk-management asset despite the recent price correction.
However, ETF demand does not guarantee an immediate recovery. Short-term prices can remain under pressure when traders respond to changing interest-rate expectations, currency movements or technical breakdowns.
Investors should therefore distinguish between the longer-term demand picture and the near-term trading trend.
Festive and Wedding Demand Supports India's Gold Market
Domestic gold demand has shown signs of improvement as India enters its festive and wedding season.
According to Kavita Chacko, Research Head for India at the World Gold Council, domestic gold price discounts narrowed significantly during October. Discounts declined from an average of approximately $66 per ounce in September to around $8 per ounce as of October 16.
The improvement indicates that seasonal demand has strengthened as lower prices have encouraged some buyers to return to the market.
Gold bar and coin demand, however, has moderated during the year amid weaker price momentum. Gold ETF inflows in September reached approximately $466.2 million, the highest monthly level in seven months, with nearly three tonnes added to holdings during the month.
For India, international gold prices, the rupee-dollar exchange rate, import costs and domestic premiums or discounts all influence the final price paid by consumers.
Consequently, a decline in international gold prices does not necessarily translate into an equivalent reduction in domestic gold rates.
Jewellery buyers and investors should also consider making purchases according to their financial requirements rather than attempting to predict short-term market bottoms.
Gold Price Forecast: Key Support and Resistance Levels
The technical outlook remains cautious following gold's break below its previous October trading range.
Immediate support: $4,000 per ounce
The $4,000 level is the first important support zone to watch. If prices stabilise around this level, gold could attempt a short-term recovery. However, a sustained break below it could indicate that selling pressure remains strong.
Next support: $3,930 per ounce
A decisive breach of $4,000 could bring $3,930 into focus. This level is particularly important for traders monitoring the possibility of further downside.
First resistance: $4,140 per ounce
On the recovery side, $4,140 is the first important resistance level. Gold would need to move back above this zone to signal that selling pressure may be easing.
Major resistance: $4,227 per ounce
The $4,227 level represents a higher resistance zone close to the upper boundary of the metal's previous October trading range. A sustained recovery above this level would indicate a stronger improvement in the near-term technical picture.
These levels are based on the analyst's assessment cited in the report and should be treated as reference points rather than guaranteed price targets.
Why Traders Should Avoid Aggressive Selling Without a Stop-Loss
The recent decline has strengthened the bearish near-term outlook, but selling aggressively after a sharp fall can expose traders to sudden reversals.
Gold can react quickly to geopolitical headlines, changes in crude oil prices, movements in the dollar and bond yields, or unexpected central bank signals. A short position initiated after a large decline may face substantial losses if the market rebounds sharply.
A stop-loss helps define the level at which a trader exits a position if the market moves against the intended direction. Position sizing is equally important because even a technically correct view can result in losses when market movements are larger than expected.
Traders should also avoid assuming that the $4,000 support level will necessarily hold. If it breaks decisively, the next support zone could become relevant. Conversely, if gold recovers, resistance levels may limit the upside.
The analyst's warning is therefore not that gold cannot fall further, but that bearish positioning should be managed carefully rather than pursued without a predefined risk limit.
Market Outlook
Gold's near-term outlook remains under pressure following its sharp decline on October 22. Rising crude oil prices, uncertainty surrounding US-Iran relations, a firmer dollar and technical selling have outweighed the support offered by lower US bond yields and continued ETF inflows.
The immediate level to monitor is $4,000 per ounce. A decisive break below this threshold could expose gold to the next support at $3,930. On the upside, resistance at $4,140 and $4,227 will be important levels for assessing whether a recovery is gaining strength.
The direction of crude oil prices, the US dollar, bond yields and Federal Reserve expectations will remain central to gold's performance. Meanwhile, continued ETF inflows and seasonal physical demand in India may offer some underlying support.