Gold (XAU) Breaks $4,000 for First Time Since July Before Recovering to $4,021

Update 02:30 UTC: Fresh detail on the tech side of the selloff has emerged with the weekly tallies: through October 23, the Dow Jones Industrial Average gained 0.41% for the week while the S&P 500 lost 0.47% and the Nasdaq Composite fell 0.71%, a split that kept the damage centered on AI-linked names.

AI Selloff Reaches Bullion

Gold broke below $4,000 an ounce on Friday, October 23, for the first time since July, touching an intraday low of $3,986.85 before stabilizing. The level had acted as a floor since mid-summer, and three weeks earlier a major Wall Street bank had named it as support for the metal. The break arrived without a gold-specific trigger: it came from the technology sector, where artificial-intelligence worries knocked US equities lower on Thursday and the selling carried into bullion the next morning. The Nasdaq Composite fell 2.60% to 26,008.86, the S&P 500 lost 1.21%, and the Dow Jones Industrial Average closed nearly flat, which kept the damage concentrated in tech. Gold dropped $116 in a single session, economist Peter Schiff noted in a post on X. A separate estimate circulating on X put the combined loss for gold and silver since Thursday at more than $1.3 trillion and took the metal to a three-month low, with silver at its weakest level in 11 months. Justin Lin of Global X ETFs described the move as a liquidity-driven selloff, explaining that in sharp downturns investors often sell the metal to cover margin calls. The same AI worries cut the other way: they have pushed bets on another Federal Reserve rate increase below 10% for next week, and Lin argued that a softer rate outlook should support the metal in the near term. Earlier in the session the metal had traded near $4,002, down 7.4% from its January 1 level, and banks and mining executives now differ on how far the fall could run.

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Later on Friday, by 15:50 UTC, Reuters and Bloomberg tallies put spot gold at $4,016.27, down 0.2% on the day after a dip to the lowest level since July 20 and a partial recovery from the near-$4,002 reading earlier in the session, leaving the metal on course for a 3.5% weekly loss, its steepest since June. December futures on COMEX had by then fallen 0.7% to $4,030.40. A new pressure point has emerged from energy markets: crude oil jumped about 4% to a five-month high after a Houthi attack targeting Saudi Arabia, reviving inflation worries that could delay Fed easing. Analysts put the odds of a rate increase in December near 80%, with next week's PCE price index as the key input. Silver slipped 1% to $53.98, platinum traded at $1,568.58 and palladium held near $1,054.50, all heading for weekly losses as well.

A clearer picture of the Saudi strike has emerged: the Gulf Cooperation Council's secretary general said in a statement carried by the official Saudi news agency SPA that Houthi forces attacked King Fahd International Airport in Dammam and the Shaybah oil field, and the statement reported casualties and damage to facilities, though independent verification at the sites has not been established. The attack pushed Brent crude to an intraday reading of $112.30 a barrel, before it traded at $111.52 by 11:00 GST. Fresh analysis ties the energy rally to bullion's slide: higher oil prices feed energy-driven inflation worries and keep expectations alive for further Fed tightening, a headwind for a yield-less metal, although geopolitical stress can simultaneously support gold through safe-haven demand. The Fed's next meeting remains scheduled for October 27 and 28.

Later on Thursday, by 15:50 UTC, the selloff deepened into the New York close: spot gold ended at $3,993.35 an ounce, down 0.77% on the day, after sliding below $3,980 intraday and failing to reclaim the $4,000 line, taking the weekly loss to about 4%. December COMEX futures closed 1.3% lower at $4,007.90. The bond and currency backdrop added pressure, with the US 10-year yield climbing 0.038 percentage points to 4.999% as Brent crude touched $117 a barrel, and the dollar index rising 0.18% to 101.486. Jim Wyckoff of American Gold Exchange said the jump in oil limits central banks' room to ease, and pointed to margin calls from the tech selloff as a driver of selling in gold and silver.

Fresh detail on the tech side of the selloff has emerged with the weekly tallies: through October 23, the Dow Jones Industrial Average gained 0.41% for the week while the S&P 500 lost 0.47% and the Nasdaq Composite fell 0.71%, a split that kept the damage centered on AI-linked names. The week's new pressure point came from Meta, which reported third-quarter revenue of $64.6 billion, up 26% year on year, alongside negative free cash flow of $2.12 billion, and guided 2026 capital expenditures to a range of $135 billion to $145 billion, lifting the lower end of its prior outlook from $130 billion. Reporting on the week also flagged a second driver behind the oil rally pressuring bullion: rising US-Iran tensions as a risk to Middle East energy supply, with Brent on course for a fourth straight weekly gain.

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Banks and Miners Split on the Floor

Earlier this month, Morgan Stanley's Amy Gower had called $4,000 a floor for the metal, pointing to central bank buying, lower bond yields and cheaper oil. The buying has continued since that call. Goldman Sachs estimates central banks purchased 79 tonnes in August, and provisional World Gold Council figures put September purchases near 63 tonnes so far, the most since November 2024. The accumulation has not stopped prices from falling in September and October. Endeavour Mining chief executive Ian Cockerill said this week he did not know whether $4,000 was the floor, but added that if it was not, it stood close to the next leg up in the gold price. Below $4,000, Lin sees the next critical test at $3,900, a little over 2% under Friday's low. Bank of America has set its line lower, earlier flagging a possible $3,750 low while still forecasting a $4,000 average for the fourth quarter. Not every strategist expects the weakness to last, and the disagreement starts with how the selloff should be read. Lin still anticipates a V-shaped rebound, citing lower rates, a faltering AI trade and a weaker dollar. Schiff went further, arguing that a stock market crash would be bullish for gold because the metal has already corrected. Benjamin Cowen of IntoTheCryptoverse takes a more patient view, placing gold in the late stages of its bear market while cautioning it could struggle for longer. The Federal Reserve meets on October 27 and 28. A hold would deliver the rate relief Lin expects, while a surprise hike would bring the $3,900 test closer.

Positioning After the Break

COINOTAG data shows gold at $4,021.34, down 2.01% over the past 24 hours, after a session range of $3,994.52 to $4,105.40. Our composite scoring puts the strongest support at $3,956.57, rated 76 out of 100, with resistance at $4,114.47 rated 92 out of 100. Friday's break of $4,000 moved the metal toward that lower shelf, and the $4,114.47 line now caps any rebound. The daily trend reads bearish, with the 14-day RSI at 31.5, close to oversold territory. In derivatives, perpetual open interest stands near $1.02 billion with funding at 0.0119% per interval, a mild long-side tilt. A close below $3,956.57 would open the path toward $3,900; a defense of that level would put the rebound case back on the table (as of 08:44 UTC).