Gold has traded lower for three days, depreciating beyond 4% this week. New US-Asian trade agreements are increasing risk appetite, affecting gold prices. The metal reached three-week lows at $3,886 before climbing back above $3,900.

Impact Of Trade Agreements

A US-Japan agreement on rare earth supply aids the risk appetite. Attention is on the Trump-Xi summit and US-China discussions, with signs of de-escalation boosting hopes of avoiding a trade war.

Technical analysis shows an immediate bearish trend with Gold correcting from all-time highs. Failure to regain support at $4,010 confirms the downward trend. Prices are testing the 61.8% Fibonacci retracement of a recent bull run near $3,920.

If the correction continues, prices may target between $3,795 and $3,830. Attempts to rise further may be resisted near $4,010 and $4,150, with previous support at $4,185 possibly limiting rallies.

FAQs explain Gold’s role as a store of value and hedge against inflation. Central banks are major holders, having added 1,136 tonnes worth $70 billion in 2022. Gold has an inverse correlation with the US Dollar and is affected by geopolitical and economic factors, particularly interest rates and USD behaviour.

Market Dynamics And Expectations

Given the current market sentiment today, October 28, 2025, we are seeing a clear shift away from safe-haven assets. The immediate driver is optimism surrounding new US-Asia trade deals, which is pushing investors toward riskier assets and weighing on gold. The price breaking below the key $4,010 level confirms this bearish momentum is in play for now.

Derivative traders should consider strategies that benefit from further downside or increased volatility. The next significant target area appears to be between $3,795 and $3,830, which aligns with key technical retracement levels. This view is supported by the strength of the US Dollar, with the Dollar Index (DXY) recently trading above 112, a level we haven’t consistently seen since the aggressive rate hikes back in 2022.

The upcoming summit between Presidents Trump and Xi is a major event that introduces significant volatility. A positive outcome could accelerate gold’s decline, while any unexpected breakdown in talks could cause a sharp reversal. This suggests that options strategies could be useful to hedge against a sudden spike in price, as implied volatility will likely rise heading into the meeting.

This risk-on environment is not isolated, as we’ve seen the S&P 500 climb over 3% in October, pushing toward new highs and further pulling capital away from non-yielding assets like gold. While World Gold Council data for Q3 2025 showed that central banks continued to be net buyers, their pace has slowed compared to the record purchases in 2022 and 2023. This underlying support is not enough to counter the current short-term selling pressure.

For any bearish position, it is crucial to monitor the $4,010 level as a key area of resistance. A sustained move back above this price would suggest the current downward correction is losing steam. The next major resistance would be around the $4,150 mark, and a break there would invalidate the immediate bearish outlook.

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