Gold tumbles through key support as traders price in another Fed hike

Gold futures extended their slide on Monday, September 28, with prices slicing through several closely watched Fibonacci retracement levels tied to the metal’s August rally. Those Fibonacci levels, widely used in technical analysis as potential support and resistance zones, gave way in quick succession, leaving spot prices in the low‑$4,100s per ounce and marking the weakest levels in several weeks.

The sell‑off comes as traders ramp up bets that the Federal Reserve will hike rates again at its October 27–28 meeting, following its first increase since 2023 earlier this month. Stalled negotiations with Iran and the resulting risk premium in crude oil are feeding concerns that inflation could stay sticky, pushing real and nominal yields higher. For gold, that combination is particularly toxic: the metal is viewed as both a safe‑haven and an inflation hedge, but because it offers no yield, its relative appeal tends to suffer when interest rates move sharply higher.

For much of September, investors were split on whether the Fed’s recent move would prove to be a “one‑and‑done” adjustment or the start of a more extended tightening phase. The recent break in gold suggests the latter view is gaining traction. In the near term, damaged charts may invite additional technical selling, yet any further escalation in geopolitical tensions or a deeper pullback in equities could quickly revive safe‑haven demand for the metal.