Gold traders are heading into another interesting week as both fundamentals and technical offer mixed signals.

While the broader structure still favors the bears, recent price action suggests there could be one more liquidity hunt before the next major move.

So, what should traders be watching? Let’s dive in.

Fundamental Outlook: Rate Hike Expectations Continue to Fade.

One of the biggest drivers behind gold’s recent movement has been the changing expectations surrounding Federal Reserve policy.

Following the CPI release on 14 October 2026, the probability of an October rate hike surged to as high as 53%. However, those expectations have since cooled significantly, dropping below 30% as Treasury prices rallied strongly and several Federal Reserve officials delivered more dovish-than-expected comments.

A softer rate outlook generally supports gold because lower interest rate expectations reduce the opportunity cost of holding non-yielding assets such as gold.

But here’s the question:

Has the market fully priced in the Fed’s dovish stance, or could another surprise shift in expectations spark volatility in gold next week?

Technical Analysis: Bearish Structure Still Intact ?

Looking at the 4-hour timeframe, XAU/USD recently created a Bearish Break of Structure (BOS), signaling a continuation of the prevailing downtrend.

Before the decline, gold reached an all-time high of $4,141.89. Price later dropped sharply to $4,111.47, catching many traders by surprise.

Since then, gold has started showing signs of a short-term bullish retracement. From an Smart Money Concepts (SMC) perspective, this move could be interpreted as an attempt to build liquidity or create inducement before the market reveals its next directional move.

What Could Happen Next?

There are two major scenarios traders should consider:

Scenario 1: Liquidity Sweep and Mitigation

Price may continue pushing higher to sweep liquidity resting above recent highs. This move could allow price to mitigate a key Point of Interest (POI) or Order Block before creating a Change of Character (CHOCH) and resuming the larger bearish trend.

This would be a classic SMC setup that many traders wait patiently for.

Scenario 2: Immediate Bearish Continuation

The second possibility is a direct continuation lower without a deeper retracement.

In this scenario, traders will be watching whether gold can break below the key level at $4,066.77. A successful break below this level could confirm further downside momentum and reinforce the bearish structure already visible on the chart.

The Big Question

Will gold sweep liquidity and mitigate the order block first?

Or will sellers remain in control and push price below $4,066.77?

Only the coming week’s price action will provide the answer.

Why Patience Matters for SMC Traders

One mistake many traders make is entering too early simply because they anticipate a setup.

The market often creates inducements, false breakouts, and liquidity grabs before making its real move.

For SMC traders, waiting for confirmation such as liquidity sweeps, mitigation, and changes in market structure can help improve decision-making and reduce emotional trading.

Are you willing to wait for confirmation, or do you prefer entering early in anticipation of the move?

Risk Management: The Most Important Part of Trading

No matter how strong a setup may look, risk management remains the foundation of long-term trading success.

Profitable traders understand that preserving capital is just as important as growing it.

A few key principles include:

Risk only a small percentage of your account per trade.
Never increase position size to recover losses.
Always use a predefined stop loss.
Maintain a favorable risk-to-reward ratio.
Accept that losses are part of trading.

Many traders spend hours searching for the perfect entry, but very few focus enough on managing risk.

The truth is simple:

A trader with average entries and excellent risk management often outperforms a trader with great entries and poor risk management.

Final Thoughts

The current market structure suggests that gold remains bearish on the 4-hour timeframe. However, the recent bullish retracement opens the possibility for a liquidity sweep and mitigation before the next major move unfolds.

Whether price breaks below $4,066.77 or rallies into a key order block first, traders should remain patient, disciplined, and focused on risk management.

What do you think?

Do you expect gold to break below $4,066.77 next week?
Are we about to see a liquidity sweep before the bearish continuation?
How do you manage risk when trading Smart Money Concepts setups?

Share your thoughts in comment section and let’s discuss the possibilities for the week ahead.

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always conduct your own analysis and use proper risk management before trading financial markets.