Gold fell nearly 2% in Asian trading on Monday, dropping below $4,200 and breaking through support at $4,234.68 and the 61.8% Fibonacci retracement at $4,230.70. Higher oil prices, renewed inflation concerns and expectations of further Federal Reserve tightening are now reflected not only in fundamental pressure but also in a weaker chart structure. The next momentum level is $4,113.82, while the more significant trend test lies between $3,937.19 and $3,942.43.
Monday's session is still under way, and gold has so far made an intraday break below the support cluster around $4,230. A daily close below that area would make the breakdown more conclusive. Gold has also slipped below its 55-week exponential moving average, near $4,225, though a weekly close is needed to confirm that move. Short-term technical signals have weakened, but the longer-term trend has not yet been confirmed as bearish.
Break below $4,230 weakens August's recovery
The area around $4,230 is more than near-term support: it marks the 61.8% retracement of gold's rise from the July low of $3,942.43 to $4,697.07. Giving back more than 60% of that advance weakens the case that August's rebound could develop into a sustained rally. It does not, however, confirm that the broader decline from $5,598.75 has resumed.
Since September, gold has faced pressure from rising US Treasury yields, a stronger dollar and renewed expectations of Fed rate hikes. Until Monday, those factors had not clearly damaged the technical structure of the move from $3,942.43 to $4,697.07. The break below $4,230 means interest-rate pressure is now showing up more directly in the chart, rather than merely limiting the metal's recovery.
Stalled US-Iran talks keep oil and rate concerns in play
US-Iran negotiations have encountered a new obstacle. Washington rejected an Iranian proposal involving the reopening of the Strait of Hormuz and a return to nuclear talks, while Iran sought concessions including relief from the US naval blockade and oil sanctions. US Ambassador to the United Nations Mike Waltz said Tehran wanted sanctions relief and the release of frozen assets as conditions for moving forward.
Diplomatic channels remain open. US President Donald Trump said further contact with Iran was expected this week, while Qatar's mediators continued efforts between the two sides. Iranian Foreign Minister Abbas Araghchi also said Iran remained ready to negotiate. The talks are therefore stalled, rather than over.
Brent crude rose about 1.6% early on Monday, while US West Texas Intermediate gained around 1.1%, reflecting renewed doubts about a near-term US-Iran agreement. For gold, the key question is not just the geopolitical tension itself, but whether diplomacy can ease the energy-price shock and, in turn, reduce inflation and interest-rate pressure.
Since the war involving Iran began in late February, periods of heightened tension have repeatedly pushed oil prices higher before feeding into inflation expectations and monetary-policy pricing. As trading began on Monday, markets put the probability of another Fed rate hike in October at about two-thirds. The Fed raised rates by 25 basis points in September, taking its target range to 3.75%–4.00%. Officials have also continued to stress that inflationary pressure is not coming from oil prices alone.
$4,113.82 is the next momentum test
After the break below $4,230, attention has shifted to $4,113.82. That level represents a 61.8% projection of the decline from $4,697.07 to $4,234.68, measured from the rebound high at $4,399.58. A decisive break below it would point to stronger downside momentum in the decline that began at $4,697.07 and raise the prospect of a move toward the $3,937.19–$3,942.43 area.
The $3,937.19 projection marks a 100% extension of the decline and sits almost on top of the July low at $3,942.43. That zone would provide a more important test of the broader trend than $4,113.82. The pullback from $4,697.07 has not yet clearly taken the form of an impulsive decline and can still be interpreted as a correction, such as a zigzag. But after gold has surrendered more than 61.8% of its prior advance, that interpretation faces a tougher test.
If the rise from $3,942.43 to $4,697.07 marked the start of a new impulsive advance, bulls would generally look for the retracement to hold at a shallower level. The deeper decline has also increased the possibility that August's rebound was a B-wave or corrective rally within the larger downturn from $5,598.75. That is not confirmation of a trend reversal; gold's reaction at lower support will be key.
$3,942 will test the broader trend
If gold finds support in the $3,937.19–$3,942.43 area and stages a clearly overlapping corrective rebound, then fails to break through the $4,399.58–$4,402.40 region, the pattern could still fit a larger correction rather than an accelerating decline.
By contrast, a decisive break below $3,942.43 would take out the starting point of August's recovery and provide stronger evidence that the broader decline from $5,598.75 has resumed. The next longer-term downside reference would then be $3,606.83, the 50% retracement of the entire advance from $1,614.92 to $5,598.75. That remains a distant reference, not an immediate target simply because gold has fallen below $4,230. The market would first need to test $4,113.82 and $3,942.43.
Bulls need to reclaim the $4,316 area
To weaken the near-term bearish structure, gold would first need to regain $4,315.82. That level is close to the 55-period exponential moving average on the four-hour chart, near $4,312, giving it relevance as both horizontal and dynamic resistance. While gold remains below $4,315.82, near-term downside risks remain elevated.
The four-hour relative strength index has fallen to around 30. A rebound after the sharp drop would not be unusual, but an oversold bounce alone would not repair the technical picture. A move back above $4,315.82 would provide stronger evidence that the breakdown is losing momentum rather than merely pausing. On the daily chart, gold had already run into resistance near its 55-day moving average around $4,333. On the weekly chart, it has slipped below the 55-week average near $4,225. Neither signal alone confirms that a long-term decline has resumed, but both raise the pressure on bulls to reverse the deterioration.
The levels to watch are clear: $4,230 is the first warning, $4,113.82 is the momentum test, and $3,937.19–$3,942.43 is the broader trend threshold. Substantive progress in US-Iran talks that brings oil prices down sharply could ease inflation and rate concerns. Until then, if $4,315.82 continues to cap rebounds and energy prices keep influencing inflation and rate expectations, gold remains under near-term downward pressure.