In October 2025, XAU/USD (spot gold) continued its strong upward trajectory, reaching an all-time high of 4380 before closing the month at 4001. The opening price stood at 3862, while the monthly low was recorded near 3820. Despite the record high, the monthly candle formed a Shooting Star pattern — a signal worth deeper examination from both technical and behavioral perspectives.
Price Action and Technical Context
The appearance of a Shooting Star candlestick typically reflects temporary rejection of higher prices after a strong rally. However, by itself, it is not a reversal signal. The psychological meaning behind the pattern lies in the emergence of selling pressure after euphoria peaks. Confirmation, as always, depends on volume and subsequent price response.
During October, the first Shooting Star emerged near 4380 with below-average volume, implying limited conviction from sellers — possibly a pause rather than a reversal. Later, a second Shooting Star with a similar shadow-to-body ratio appeared, this time accompanied by higher trading volume. This sequence provides stronger evidence of genuine weakness within the bullish structure, aligning with classical pattern validation principles.
Momentum and Indicator Behavior
Momentum indicators reflected overextended conditions. The Relative Strength Index (RSI) surged above 90 — levels typically associated with temporary exhaustion zones — while all major Moving Averages (MA) remained upward-sloping, confirming a structurally intact uptrend. The Average True Range (ATR) stood at 308, indicating elevated but controlled volatility consistent with trending markets.
Support and Resistance Zones
From a structural standpoint, the nearest demand cluster (support) lies around 3800–3850 — corresponding to the monthly low and prior breakout base. Resistance is observed near 4150–4200, where the upper wicks of October’s candles repeatedly met rejection. This range is likely to serve as a reference zone for institutional liquidity testing in the following sessions.
Volatility and Statistical Observations
Quantitatively, October exhibited an average daily range of 97 points, with the largest single-day move reaching 291 points. The median range stood at 78, and the modal range — the most frequent — was observed between 70 and 80 points. These figures suggest an asymmetric volatility profile: most sessions remained moderately active, interspersed with a few extreme moves contributing to heavy-tailed distribution behavior, typical for gold markets during momentum-driven phases.
Summary and Research Takeaway
October 2025’s XAU/USD behavior represents a classic case of momentum extension reaching statistical and psychological limits. The Shooting Star formation, confirmed by increasing volume on the second occurrence, provides a valuable study of exhaustion rather than prediction. Quantitatively, volatility expansion without directional resolution suggests a transitional phase — often preceding rebalancing or volatility clustering — consistent with probabilistic market behavior models rather than deterministic reversal assumptions.