$4,000 breached! After a sharp drop in gold, why are institutions more confident in going long?

Today, Thursday (November 12) during the Asian session, the rebound remains weak! Spot gold is currently trading at 3978.03, down 0.24%. The daily K-line moving averages are perfectly aligned for a bearish trend, with the price suppressed by the MA5 (4041.82). The price has retreated all the way down from the 4696.16 high, fully displaying a weak market. Although today's opening was at 3986.60 and it once surged to 4000.34, upward momentum was insufficient. Watch the intraday low at 3968.50; if this level is lost, the 3870.13 defense line will be in jeopardy!

[News Brief]

Spot gold has just experienced a hard landing—on Wednesday, it fell below the crucial psychological threshold of $4,000/oz, marking a new recent low in weakness. In the previous trading day, gold prices plummeted by about 2.67%. The market is repricing the path for Fed rate hikes: The US October CPI rose 0.4% month-on-month, core CPI rose 0.3% month-on-month, both beating expectations. Traders have fully priced in a December rate hike, and are even beginning to bet on a larger increase. The US Dollar Index surged to a 19-month high, US Treasury yields rose simultaneously, and gold, a zero-yield asset, took a significant hit from the increased opportunity cost.

Short-term technicals have flipped. $4,000 has shifted from a support level to a fierce battleground between bulls and bears: if it cannot be regained, the annual low near $3,870 will become the next target for bears; conversely, if gold can reclaim $4,000 and break above the $4,050–$4,060 resistance band, there will be room for market sentiment to recover. The $4,200 level above still serves as the medium-term watershed.

Interestingly, the more gold falls, the calmer long-term buyers become. Global gold ETFs attracted 211 tonnes in the third quarter, marking the strongest quarterly performance since 2024; even during heightened volatility in October, there was a net inflow of 19 tonnes. Central banks were even more aggressive—official gold purchases reached 321 tonnes in Q3, far exceeding the earlier estimate of 200 tonnes. Annual demand is very likely to continue being revised upwards.

Institutional quarterly average price forecasts are bold: $4,650/oz is projected for Q4 this year, and $4,850/oz for Q1 next year. These are not point-in-time target prices, but average price projections—meaning that if half of Q4 has already passed and gold is still hovering near $4,000, a strong rebound must occur in the latter half to meet these projections.

Gold at present is a classic case of "being pressured in the short term by the dollar and interest rates, but underpinned in the long run by central banks and safe-haven capital." Falling below $4,000 does not mean the bull market is over, but for bulls to regain the initiative, they must first reclaim this position with a substantial bullish candlestick.

[Latest Gold Technical Analysis]

Technically, on the daily chart, gold remains under clear downward pressure, trading below both the 20-day Bollinger band median and the 100-day simple moving average, reinforcing the recent bearish undertone. The price is compressed in the lower half of the Bollinger bands, with the 14-day Relative Strength Index (RSI) at 43, staying below midline—indicating mild bearish momentum but not yet oversold. For resistance, the initial level is near the Bollinger median at 4055, followed by the 100-day simple moving average at 4200 and the upper Bollinger band around 4215. For support, the next significant level is at the lower Bollinger band, currently near 3895. If the decline continues, sellers may take profit at this level.

According to the box framework, yesterday's price touched the lower edge of the 4050-4200 box at 4050 and broke further today, officially breaching the box's lower boundary—this means that the previous view of a "4050–4200 sideways range" no longer holds, and the daily trend has shifted to a downtrend. Combined with the 1-hour Fibonacci level from yesterday, the price has broken through the 50% retracement (4008), with the next key barrier at the 61.8% retracement (3975). At present, 3985 is just above this, making it the most critical short-term defense. If 3975 fails, then support levels at 3929 and 3870 follow. On the 4-hour chart, the price has fallen for two consecutive days and remains compressed at low levels, with momentum still leaning towards further downside. However, since the RSI at 43 has not entered oversold territory, further declines are possible, and a technical rebound is not yet inevitable.