Following a parabolic rally over the past two months, analyst Katie Stockton of Fairlead Strategies, LLC suggests that gold is entering a period of prolonged consolidation to reset its long-term bull trend. This follows a sharp pullback that saw gold prices fall below the psychologically significant $4,000/oz level.
Key takeaways from Katie Stockton and other analysts:
Pullback is a correction, not a total collapse: While gold has retreated from record highs near $4,358/oz, the current downturn is considered a healthy correction after a strong run, not a sign of the bull market ending.
Technical indicators signal downside momentum: The daily MACD for gold is on a "sell" signal, and weekly stochastics have turned down, indicating short-term momentum has shifted to the downside.
Key support and resistance levels: Near-term gap-based support is at $3,927/oz. A breach of this level could expose the 50-day moving average, currently around $3,766/oz. The recent highs near $4,358/oz define the top of the new trading range.
Historical precedent for pullbacks: Bank of America notes that monthly pullbacks of over 10% are not uncommon in past gold bull markets and do not signal the end of the trend, provided the fundamental macro drivers remain unchanged.
Consolidation allows new buyers to enter: Analysts suggest that a period of consolidation is a normal and healthy market function that helps clear out excessive speculation and offers opportunities for new buyers to enter.
Macro factors still support gold: Underlying factors such as central bank buying, geopolitical uncertainty, and institutional demand continue to provide long-term support for gold.
Recent gold price action (October 2025):
Highs and subsequent drop: Gold retreated significantly after hitting a record high above $4,358/oz. In late October, prices fell below $4,000/oz following profit-taking and resilient U.S. economic data.
Fluctuating prices: On October 28, spot gold dropped below a key trendline, which now acts as resistance around $4,075–$4,085. By October 29, gold attempted to recover some losses, finding temporary support around $3,950.
In summary, while gold's long-term outlook remains bullish due to macro fundamentals, technical analysis suggests a multi-week consolidation phase is underway following its recent parabolic rally. Investors should watch key support and resistance levels for the next directional move.