What happened
Yesterday’s note covered the first leg: gold climbed back above 4,000 as early midterm results came in (read it here). The move did not stop there. In the late US session on Wednesday, gold pushed into the old swing high near 4,069–4,070 twice. Both times it closed back under it. Then, in the first hour of Thursday’s Asian session, one hourly candle closed at 4,089.00. The next hour ran to 4,135.50, and by 03:00 UTC gold had printed 4,147.00, its highest level since 22 October.
Since then gold has been ranging. A 05:00 UTC candle dropped from 4,141.00 to 4,109.00, and price has spent the London session between roughly 4,112 and 4,138. At 13:15 UTC it stood near 4,121.00.
Why it matters for gold
Gold pays no interest. That is why it reacts so strongly to the dollar and to real (inflation-adjusted) yields. Markets read the midterm result as likely fiscal gridlock: less room for big new spending and less pressure on government borrowing. Bond yields fell, and the dollar slid to its weakest level in more than a month. A cheaper dollar makes gold cheaper for buyers abroad. Lower yields reduce what an investor gives up by holding gold instead of bonds.
The same news hit oil. Crude fell sharply on Wednesday as part of the geopolitical risk premium came out of the price. Lower oil can ease inflation worries over time, which matters for how far the Fed goes.
That is the catch. Even after this rally, futures price more than an 80% chance of a December Fed hike. Higher policy rates raise the cost of holding gold. So far the dollar and yields have been stronger forces than rate expectations. That balance can flip on one data release. Our Gold Institutional Briefing explains the rates backdrop in more depth.
The structure on the chart
On the H4 chart the week started inside a range. Price was capped near 3,972 and had sell-side liquidity resting below 3,895.50. Wednesday’s rally reclaimed 4,000. Thursday’s Asian session then closed above the clear old swing high at 4,069.00 from 29 October. That level had held buy stops above it, which is why price reached for it first.
The H1 chart shows the detail. The external swing high at 4,070.50 formed at 17:00 UTC on Wednesday. Price wicked through it at 23:00 and closed back under it: a sweep, not a break. The break came one hour later, when a candle body closed at 4,089.00. That body close is the BMS. The order block of that leg is the last down candle before it, roughly 4,058.50–4,066.50, with equal lows near 4,057.50 just below it.
Inside today’s range, the internal structure is two-sided. Buy-side liquidity rests above the Asia high at 4,147.00 and the 4,145.50 swing high next to it. Sell-side liquidity rests under the morning swing low at 4,109.00. A lower high at 4,138.50 shows sellers defending the top for now. See how we label these in order blocks on gold and CHoCH vs BOS.
Levels to watch
- 4,147.00: BSL above the Asia session high, today’s high so far.
- 4,138.50: the London lower high inside the range.
- 4,109.00: SSL under the 5 Nov morning swing low, the bottom of today’s range.
- 4,069.00–4,070.50: the broken swing high. Old resistance that price may come back to test.
- 4,058.50–4,066.50: H1 order block of the BMS leg, with equal lows near 4,057.50.
- 4,000.00: the round number reclaimed on Wednesday.
All prices are spot XAU/USD from our delayed feed, rounded to $0.50 ($1 = 10 pips). Your broker’s prices may differ by a few dollars. The free Gold Liquidity Map updates these pools through the day, and Liquidity Alerts follow each sweep step by step.
Confirmation first. A level is only a place to watch. After a sweep, our method waits for a CHoCH on a lower timeframe (a candle body closing beyond the external swing) and then a retest of the order block of the CHoCH leg. No confirmation, no trade. The liquidity sweep lesson shows the steps.
What to watch next
- Friday 6 Nov, US jobs report. Strong payrolls and wages would support the December hike case and could pull gold back toward the broken 4,069–4,070 area. Weak numbers would ease that pressure. Payroll days often bring the widest range of the week.
- Fed speakers reacting to the election and to the data.
- The dollar and the 10-year yield. They led this move. If they bounce, gold may lose its support.
- Middle East headlines and oil, which can move gold either way.
Sizing matters more on days like these: our lot size guide shows how a $10 move turns into pips and risk. If you buy physical gold, see today’s local prices on the gold rate pages.