Gold Breaks Below $3,900 as Fed Hike Odds Hit 90% for December

Gold has broken decisively below the $4,000 mark, and one TradingView analyst sees a further slide toward $3,777. In a chart analysis published under the handle Alina_XAU_Journal, the author argues that inflation data, Federal Reserve rhetoric and price structure have aligned against the metal — a combination she calls a rare convergence offering a "tailwind" opportunity for sellers.

The proximate trigger was October's U.S. consumer price index. Core CPI rose 0.3% month-on-month for the third consecutive month, exceeding expectations across the board, according to the analysis. The author writes that this "effectively shattered" the market's assumption that inflation was under control.

What did the Fed say?

The policy response followed quickly. Fed Governor Christopher Waller said explicitly that if inflation continues to accelerate, he would support a 50-basis-point rate hike in December, the analysis notes. CME's FedWatch Tool put the probability of a 25-basis-point December hike at roughly 90%, with nearly a 15% chance of a larger move.

For a non-yielding asset like gold, rising rate expectations are, in the author's words, "lethal." The U.S. Dollar Index strengthened on the repricing and briefly traded above 103, a multi-week high. A stronger dollar makes dollar-priced bullion more expensive for overseas buyers and typically weighs on demand.

The safe-haven bid also faded. The analysis attributes part of gold's unwind to Donald Trump's remark that there is "no need for a deal" between the U.S. and Iran, which deflated the oil-price risk premium built on conflict tensions. In the author's framing, inflation concerns have shifted from "supply-side shocks" to "demand-side persistence" — a change that gives the Fed more room to keep policy restrictive.

What does the chart show?

The technical picture reinforces the fundamental one. According to the analysis, gold failed to hold the 4,055–4,080 support zone after consolidating at high levels, then broke below the upward trend line connecting previous lows. The 3,972–3,988 band, which the author had flagged as secondary support, has now flipped into resistance.

More damaging still, the analysis identifies a confirmed double-top pattern near 4,150 on the daily timeframe. The author says gold has established a bearish structure of "lower highs and lower lows." With the price trading near 3,898, she concedes an oversold bounce is possible, but the MACD remains in divergence below the zero line, signaling persistent downward momentum.

Her metaphor is blunt. The market, she writes, is "like a stone pushed off a cliff — even if it strikes the rock face (support levels) on its way down, causing a brief bounce, the ultimate outcome — its continued descent — remains unchanged." In plain terms: any rebound is fuel for the next leg lower, not a reversal.

Where are the trade levels?

The author's strategy is to sell into rallies rather than attempting to "catch a falling knife" by buying the dip. Her levels:

• Short entry zone: 3,920–3,930. This band aligns with a Fibonacci retracement of the short-term decline and marks former support turned resistance. She would look for stalling signals — long upper shadows or small bearish candles — before entering shorts.
• First downside target: 3,870, which acts as a buffer near recent lows.
• Extended targets: 3,850, then potentially 3,777, based on wave-structure extension projections.

She attaches one risk caveat, and it matters: a firm foothold above 3,960 would call the short-term bearish structure into question, and traders should step aside rather than press the thesis. Her stated objective is modest — "to ensure we are on the right side of the trade."

Readers should weigh the usual caveats. This is a single analyst's technical read on TradingView, not a bank forecast; probabilities from FedWatch shift daily; and Waller's 50-basis-point scenario is conditional on inflation still accelerating by December. The levels themselves — 3,920–3,930 resistance, 3,870 and 3,777 support — are the concrete markers to watch if the breakdown thesis holds.