Gold corrects after record rally amid improved risk appetite

The gold market is undergoing a technical correction after an impressive rally pushed the precious metal to a historic high of around $4,380 last week. The price has retreated to the support level near $4,080, indicating increased volatility and a fierce battle between bulls and bears during today's early trading. The technical setup suggests that a potential reversal point is forming.

Indicator dynamics confirm weaker bullish momentum. Thus, the Stochastic Oscillator (5, 3, 3) has sharply turned down from the overbought zone to the oversold one and is now approaching 30, demonstrating a significant cooling of the overheated market. Meanwhile, the RSI (14) is at the 56 level, having retreated from overbought but remaining in neutral territory. This confirms sellers' growing dominance while leaving room for maneuver on both sides. The Chaikin indicator (3, 10), which has fallen from its peak, signals a decrease in buying pressure, which is typical for a consolidation phase following strong upward momentum.

Current trading dynamics, especially in the morning session on October 27, point to growing bullish interest in the $4,050–$4,080 zone, as confirmed by candlestick analysis. Volumes remain moderate, as is usually the case during the accumulation phase.

Fundamentally, a reduction in global risks—due to unexpected progress in trade negotiations between the US and China—is about to weigh on gold in the short term. A potential deal is undermining demand for safe-haven assets and triggering profit-taking after months of gains.

Despite the correction, long-term bullish drivers for gold remain in place. These include sustained purchases by global central banks, a strategy of hedging against rising fiscal deficits, and ongoing macroeconomic uncertainty. Expectations of another interest rate cut by the Federal Reserve (Fed) also underpin the precious metal’s price.

Take a look at the following trading plan:

Buy gold as it approaches the $4,050–$4,000 range. Take profit: $4,160. Stop loss: $3,950.

The forecast remains relevant between October 27 and November 3, 2025.