Yesterday gold went through a declining session, with the Asian open marking the start of a choppy pullback, and the long position entered above 4,100 was stopped out. After the break below 4,100, the bounce gave a clean signal to flip into a short position, and gold then fell steadily, slicing through multiple support levels and touching a low of roughly $4,020, with the short closed out at 4,060 for a profit that more than covered the earlier loss. Gold ultimately settled at $4,024, printing a large bearish daily candle.
On Friday, October 23, last night's initial jobless claims came in at just 194,000, below the 200,000 forecast and the lowest in three months. With the labor market this solid, the Federal Reserve has more justification for a December rate hike. Traders are pricing a December hike at between 78% and 86%. Holding steady in October looks very likely, but the December move now hangs over the market more firmly than before.
Separately, the Middle East is smoldering 鈥?multiple loud explosions and air-raid sirens were reported overnight in Riyadh, the Saudi capital; the US and Israel were reported to have drawn up a concrete plan to strike Iran after the midterm elections, with dozens of Israeli warplanes said to be approaching Iranian airspace. Oil spiked on the news, and the market immediately did the math: expensive energy leads to sticky inflation, which forces the Fed to keep rates high for longer or even tighten further. Gold is a zero-yield asset, so the higher rates go, the more it costs to hold.
From a technical standpoint, gold extended its corrective decline yesterday and, although it fell to the anticipated 4,000 round-number threshold, it has already made a piercing move through it, raising the risk of greater intraday volatility. There is a chance the decline continues, and there is also a chance of a rebound to test overhead pressure. During the day, watch the battle for 4,000 first. If the white session can reclaim that level, then focus on the resistance tests around 4,030 and 4,050 above. If instead price spends the day oscillating narrowly around 4,000, then beware the risk of another leg down in the evening session, in which case the dense zone of prior lows around 3,960-3,950 comes into view as the next battleground.
In short, 4,000 was broken early but the move has not extended so far, and I would advise against rushing to catch the falling knife or to chase the short; wait for it to stabilize on its own. Next week's Fed meeting is the real test. With today being Friday, beware of heavy profit-taking by shorts. During the white session, watch the resistance levels mentioned above 鈥?if they hold, sell; if they break, buy. For intraday operations, the suggestion is: gold: go long at 4,008-4,006, stop loss at 3,999, target 4,050-4,060, and hold if it breaks higher. If it breaks back below the 4,000 mark, go short again, targeting 3,950-3,940.
Key economic data and events to watch today: Friday, October 23, 2026, 21:45 US October S&P Global Manufacturing PMI preliminary, 21:45 US October S&P Global Services PMI preliminary, 22:00 US October University of Michigan Consumer Sentiment final, 22:00 US October one-year inflation expectation final.
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