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

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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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.