Gold Price Forecast This Week: Can XAU/USD Recover After Crashing Below $3,900?

Key Takeaways

• XAU/USD opened the week near $3,900 after plunging 3.6% on Friday and reaching its lowest level since October 2025.
• Gold has fallen in seven of the past nine weeks and is approximately 17% below its August high.
• The US midterm elections, ISM surveys and October employment report are the week’s main market catalysts.
• Approximately 73% of interest-rate futures currently price a Federal Reserve rate increase in December.
• Gold must reclaim $4,000 to improve its short-term outlook, while $3,800 to $3,840 represents the most important downside support zone.

The gold price forecast this week depends on whether XAU/USD can stabilise after its sharpest daily decline in months pushed bullion below the psychologically important $3,900 level.

Spot gold rebounded toward $3,910 during Monday’s session after closing around $3,875 on Friday. However, the recovery remains modest compared with the previous session’s $145 decline, leaving the broader technical trend under pressure.

Why Did Gold Crash Below $3,900?

Source from: https://goldprice.org/

Gold fell approximately 3.6% on October 30, sliding from above $4,020 to a low near $3,870. The decline took bullion to its weakest level in approximately one year and completed its worst October performance since 2008.

Part of the selling reflected rising expectations that the Federal Reserve will increase interest rates again in December. Higher rates and real yields make non-yielding gold less attractive relative to government bonds and cash.

The technology-sector sell-off also contributed to the decline. As the Nasdaq dropped 2.9%, some investors sold liquid assets such as gold to meet margin requirements and cover losses elsewhere in their portfolios.

Gold has now declined in seven of the past nine weeks and is approximately 17.5% below its August peak. Weekly momentum indicators have fallen to their weakest levels since 2022, confirming that the correction extends beyond a single volatile session.

Lower Oil Prices Support a Modest Recovery

Gold recovered toward $3,900 as oil prices declined on renewed diplomatic efforts involving the United States and Iran.

Lower energy prices can reduce future inflation pressure and weaken the case for additional Federal Reserve tightening. WTI crude fell toward $100 after reaching approximately $104 on Friday.

The US Dollar Index also remained close to 101.95 rather than extending its recent advance. A softer dollar makes gold less expensive for buyers using other currencies.

However, the rebound has not yet changed the broader outlook. Several Federal Reserve officials argued on Friday that additional rate increases may still be required. Interest-rate futures currently indicate approximately a 73% probability of a quarter-point increase in December.

US Midterm Elections Could Increase Volatility

The United States will hold its midterm elections on November 3, with control of both chambers of Congress at stake.

Prediction markets strongly favour Democrats winning the House and give the party a substantial probability of also controlling the Senate. Because that outcome is increasingly reflected in market prices, the largest reaction could follow an unexpected Republican sweep.

A Republican victory in both chambers could increase expectations for further fiscal expansion, potentially lifting Treasury yields and the dollar while pressuring gold initially. Democratic control could limit new spending legislation and reduce long-term yield pressure.

A delayed or contested result would present a different scenario. Higher political uncertainty could increase demand for safe-haven assets and support gold even if the dollar also strengthens.

US Jobs Data Will Be the Week’s Main Gold Catalyst

The October employment report on November 6 will provide the most important test for the Federal Reserve outlook.

Several economic releases could move XAU/USD before Friday’s report:

Economists expect nonfarm payrolls to increase by approximately 63,000 after a 29,000 rise in September. Unemployment is forecast to remain at 4.2%, while average hourly earnings may accelerate from 0.1% to 0.3% month over month.

A stronger report would support another Fed rate increase and could drive gold back toward its recent lows. Weaker employment or wage growth would reduce tightening expectations and improve the possibility of a recovery above $4,000.

XAU/USD Technical Levels to Watch

Gold’s immediate resistance is located between $3,970 and $4,000. This area includes the major psychological threshold and the zone where buyers became trapped during Friday’s decline.

A sustained move above $4,000 would expose $4,017, followed by the 20-day exponential moving average near $4,070. Gold would need to reclaim approximately $4,165 to provide stronger evidence that its multi-week downtrend is reversing.

Initial support is located at $3,870, close to Friday’s low. Below that level, the most important technical area is between $3,800 and $3,840, where the decline approaches longer-term trend and Fibonacci support.

A weekly close below $3,800 would weaken the broader multi-year uptrend and could expose $3,569, followed by the $3,430 region.

Gold Price Forecast Scenarios This Week

Gold’s direction will depend mainly on whether economic data strengthen or weaken expectations for a December Fed increase.

The near-term trend remains bearish while XAU/USD trades below $4,000. Nevertheless, oversold momentum and major support around $3,800 to $3,840 create the potential for a technical rebound.

For gold to establish a more durable recovery, it will need weaker US data, lower Treasury yields and a clear move back above $4,000. Failure to defend $3,800 would instead signal that the correction has entered a more serious phase.

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