Gold Bounces Back Above $4,000 — Is $3,750 Next?
Gold bounced back above $4,000 on Friday, October 23, hours after dipping to about $3,987 an ounce, its first move below $4,000 since late July. Buyers stepped in within minutes of the dip, and gold traded near $4,026 by mid-morning in London, according to Reuters. The recovery follows the slide we covered in our report on the break below $4,000.
For Canadians, spot is only part of the price. A weaker or stronger loonie changes what you pay per gram, even on the same spot move. Check the live gold price today in Canada before you compare dealer prices. That is why a gram price in Canada can move more, or less, than the US dollar spot price suggests.
Why did gold bounce back?
The fall was driven by liquidity, not by gold itself. On Thursday, US tech stocks suffered their worst day since early June. The Nasdaq fell 2.6%, and Meta dropped about 7% as investors questioned its heavy AI spending. Gold fell almost $120 in the same rush for cash.
Justin Lin of Global X ETFs called the gold drop a "liquidity-driven selloff": in sharp falls, investors sell gold to cover margin calls on falling stocks. Once that forced selling eased, buyers returned at a round number many had been watching. Bets on a Fed rate hike next week also fell below 10%, according to Bloomberg reporting, which removed one headwind. Underneath the volatility, central banks kept buying: Goldman Sachs estimated 79 tonnes of purchases in August.
Levels to watch
Three levels now matter most:
- $4,000 — reclaimed during the day. A daily close above it keeps the bounce alive; a close back below would reopen the break.
- $3,900 — the next critical test if $4,000 fails again, according to Global X.
- $3,750 — Bank of America's flagged fourth-quarter low if selling resumes and $3,900 gives way.
Traders watch closes, not just intraday dips, to judge whether the recovery holds. A close above $4,100 would suggest the break has failed. More time below $4,000 would deepen the correction.
What happens next?
The FOMC meets Oct 27–28. Its decision comes on Oct 28. Market pricing gives about a 93% chance the Fed holds rates steady this month, according to CME FedWatch data. The tone matters more than the decision. US inflation data on Oct 29 adds a second risk point in the same week.
A firm Fed message could send gold back to test $3,900. A softer tone would support the bounce. Even after the recovery, gold is down about 3.5% this week, its steepest weekly fall since June, according to Reuters. Before you act, check what you pay over spot. Our guide to gold premiums explained shows how premiums work. Our guide on how to buy gold in Canada covers dealers, products, and taxes.
FAQ
Will gold fall to $3,750?
It is possible, but two levels stand in the way. Gold must first lose $4,000 on a closing basis, then fail at $3,900. Bank of America flagged $3,750 as a possible fourth-quarter low if selling speeds up. A firm close back above $4,000 would weaken that case.
Should I buy gold now or wait?
That depends on your goal and timeline. Volatility is high, and prices are swinging in both directions. Some buyers wait for the Oct 28 decision. Others buy in stages. Avoid paying a high premium in a rush. Compare the live price, the premium, and shipping before you decide.