Gold Oct 20: Brent's Five-Month High Knocks Gold to 4,111 – Sell the Bounce at 4,135–4,141 | Pre-NY / London Morning Wrap
Overnight: Monday's New York session was a one-way street: gold tagged 4,168.80 at 8:10 AM ET, then got sold steadily on a firm dollar and a higher 10-year (Reuters), bottoming at 4,136.80 at 1:20 PM ET and settling the day at 4,140.25, down 0.6%. Late in the day the Houthis claimed strikes on Saudi energy, airport and military targets; Riyadh hasn't confirmed. In France, authorities imposed curfews in several cities to contain the protests.
Asian session: Gold opened the Asian session at 4,141.40 (6:00 PM ET), slid to a 4,115.90 low at 9:25 PM ET, then bounced to a 4,146.50 high at 11:40 PM ET as the dollar eased 0.2% and BOJ Governor Ueda left the door open to more hikes. The bounce didn't stick: gold got sold back to 4,118 and closed the Asian session at 4,134.90 (2:55 AM ET). High 4,146.50, low 4,115.90 – a $31 range.
London morning:
London opened at 4,134.50 (3:00 AM ET), and that turned out to be the London high – 4,135.45. From there gold stair-stepped lower as Brent climbed from $109.60 to $111.70, hitting 4,111.22 at 6:10 AM ET, $4.70 under the Asia low. At 7:00 AM ET it's 4,120.50.
The 2:45 AM ET plan: right direction, but the 4,140–4,146 sell zone sat too high – gold only bounced to 4,135.45 and then dropped $24 without us. Chasing it would have broken the rules, so we let it go. The 4,116–4,122 buy zone got pierced to 4,111.22 with the 4,107 stop intact; no 1H bar closed green all morning, so we stayed flat. The 7:00 AM ET hourly closed green at 4,119.90 inside the zone – long at 4,120, stop 4,107, TP1 4,135.
Why gold fell: It wasn't the dollar. The DXY dipped to 101.75 (−0.2%) as the euro bounced on calmer streets in France and the yen jumped after a record-demand 20-year JGB auction; the dollar only firmed back to 101.90 late in the London morning. It was oil. Brent hit $111.75, the highest since May, after the Houthis claimed hits on an Aramco site in Yanbu, the Shaybah oilfield and Riyadh's airport, with at least 18 ships attacked in the Gulf over two weeks (Kpler). Expensive oil means sticky inflation, so the market is still pricing roughly a 90% chance of a December hike (CME FedWatch) even with 82% betting on a hold Oct. 28. The 10-year eased to 5.12%, but the 2-year ticked up to 4.78% and the 10-year real yield is still 2.77% – carrying gold stays expensive. The Fed is in its pre-meeting blackout, so no Fedspeak today. European stocks are down 0.7% and Nasdaq futures 0.4%, yet none of that safe-haven money is finding gold. War headlines should help gold; this time they're running through oil, inflation and rates – and hitting it instead.
What's on today's U.S. docket: Per the ForexFactory calendar, there's no high-impact U.S. data today. ADP's weekly jobs number hits at 8:15 AM ET, housing starts (est. 1.30M) and building permits (1.39M) at 8:30 AM ET, the cash open at 9:30 AM ET, and pending home sales (est. −0.6%) at 10:00 AM ET – all low impact. What matters is crude, Houthi–Saudi headlines and France, where the National Assembly votes on the revenue side of the 2027 budget today. API inventories come at 4:30 PM ET; UK CPI (high impact for GBP) is out at 2:00 AM ET Wednesday.
45-minute technicals: Gold is below both the 45-minute MA34 and MA89 and riding the lower BB90 (4,120) – four straight 45-minute closes outside the lower band. Sellers are in charge, but price is nearly $40 below the BB90 mid, so shorting here is chasing. Overhead sit two unfilled gaps, 4,124–4,128 and 4,133–4,142; the upper one lines up with the 4,135.45 London high and the 45-minute MA34 near 4,140 – that's where sellers are waiting. Below, the 4,122 S1 pivot is gone; the 4,103 S2 lines up with the Oct. 15 low at 4,099.90 and the lower BB90 on the 1H–4H – that's the next real floor.
🌍 Market Picture
As of 6:47 AM ET, Oct 20
Arrows: vs. prior close
On paper, today handed gold every reason to rally: a softer dollar, a lower 10-year, red European stocks and Houthi strikes on Saudi Arabia. Gold still lost $35, from 4,146.50 to 4,111.22. The reason is oil. Brent hit a five-month high at $111.70, and the market reads that as sticky inflation – it's holding roughly 90% odds of a December Fed hike and pushing the 2-year up to 4.78%. As long as crude stays above $110 and real yields hover near 2.8%, war headlines weigh on gold instead of helping it. My view into the New York open: lean lower, but don't chase 4,120 after four straight closes outside the lower 45-minute band. The levels that matter: 4,149 – a 1H close above it and the short is wrong; 4,100 – the Oct. 15 low, and losing it opens 4,074. The job: bank the 4,120 long from the 2:45 AM ET plan at 4,135, then wait for a bounce into 4,135–4,141 to sell; new longs only at 4,100–4,106 on a green close.
Sources: CNBC (Reuters) – Gold, FedWatch · CNBC (Reuters) – Oil · CNBC (Reuters) – Dollar, euro · CNBC – Yields · CNBC – XAU=
Sources
- CNBC (Reuters) – Gold eases as higher oil prices stoke inflation concerns
- CNBC (Reuters) – Brent hits five-month high as attacks on ships, Saudi sites fuel supply worries
- CNBC (Reuters) – Euro rebounds as French protests ease, dollar slips
- CNBC – U.S. Treasury yields move lower as investors await housing data
- Reuters (via Business Recorder) – Gold lower as firm dollar, elevated yields weigh
- The National – Oil prices hit five-month high as more Houthi attacks prompt supply and inflation fears
- ForexFactory – Economic calendar (no high-impact U.S. data Tuesday)
- CNBC – Spot gold (XAU=)
- CNBC – U.S. 10-year yield (US10Y)
More details
🧭 Plan & scenarios
- The plan: sell 4,135–4,141 (stop 4,149 · TP1 4,121 → TP2 4,106) · buy 4,100–4,106 (stop 4,091 · TP1 4,142 → TP2 4,150). Only on a confirming 45m/1H close.
- Open position: long 4,120 from the 2:45 AM ET plan (stop 4,107) – TP1 4,135 at the bottom of the sell zone; the rest comes off on a red close in the sell zone.
- Base case (~55%): a bounce fills the 4,124–4,128 gap and reaches 4,135–4,141 around the housing data and the cash open, then fails – sell a red 45m/1H close.
- Alternative (~30%): no bounce, gold breaks 4,111 and runs to 4,100–4,106 – don't chase it; buy a green close or the 45m BB90 setup.
- Bear case (~15%): a 1H close under 4,091 – no longs, step aside; next stops 4,074 (Oct 14 low) and 4,070 (S3).
- Where I'm wrong: a 1H close above 4,149 kills the short; gold heads for the 1H BB90 mid at 4,152 and the 45m MA89 at 4,159.
- Risk: no high-impact U.S. data today; ADP weekly 8:15 AM ET, housing 8:30 AM ET, cash open 9:30 AM ET, pending home sales 10:00 AM ET. Houthi–Saudi headlines, Gulf shipping and the French budget vote can whip gold $10–$15.
- More detail: MA34/MA89 – 5m 4,119/4,128 · 15m 4,130/4,137 · 30m 4,133/4,155 · 45m 4,140/4,159 · 1H 4,149/4,153 · 4H 4,154/4,156. BB90 mid on the 15m/45m/1H/2H/4H: 4,138/4,159/4,152/4,160/4,156; lower BB90: 45m 4,120 · 1H 4,103 · 2H 4,107 · 3H 4,099 · 4H 4,105. Retrace of 4,146.50→4,111.22: 38.2% 4,124.70 · 50% 4,128.90 · 61.8% 4,133.00 · 78.6% 4,139.00. Oct 19 pivots (high 4,188.90 · low 4,136.80 · close 4,140.25): P 4,155 · R1 4,174 · S1 4,122 · S2 4,103 · S3 4,070. The long's TP1 by the 80–85%-to-the-1H-mid rule (4,151.70) = 4,142–4,144. RSI(14): 5m 52 · 15m 44 · 45m 39 · 1H 38.
💡 Our take
Trade the plan, not the noise.
Commentary only, not investment advice.
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