Gold is facing the downward pressure and appeal as a safe haven asset on the US-China talks. Markets still awaiting for the specifics of the outcome and the highly anticipated summit has offered few concrete solutions. Previous trade negotiations have seen promising starts followed by setbacks.
Lack of clarity on trade policy, coupled with the Fed’s dovish shift, helped lift gold off recent lows of $3928 /oz. It had dipped amid profit-taking and renewed optimism for a US-China trade deal.
Pre FOMC rate announcement gold was supported with a weakening of US dollar. On 29th Oct’25, the US Federal Reserve cut its benchmark rate by 25 basis points to a range of 3.75%–4.00% as expected. Comments from Fed Chair Jerome Powell moderated the rally by signaling uncertainty about future cuts which would remain data dependent.
After hitting new peaks, a natural correction phase and profit taking has occurred with the long-term structural drivers remaining bullish (Structural Drivers - Monetary policy shifts, value of the US Dollar, spiraling US Debt, Central Bank demand, Persistent Inflation and Geo-political risks).
Since 24th Oct last week Gold has approximately corrected 2% and Silver has remained flat in COMEX Futures and in MCX Futures its so far corrected 1% in Gold and an upside of 1% in Silver. Market volatility is expected to continue in the near term, with buying on dips recommended. Gold futures are rallying due to unresolved trade tensions, persistent uncertainty from the Federal Reserve, and ongoing geopolitical risks. The medium-term outlook for gold remains bullish due to continued buying by central banks.
Upcoming catalysts is the United States CPI release and Job Data (Non-Farm Payroll) A cooler inflation could lift gold back to the $4100 and beyond within days. If the inflation numbers are printed higher, then due to ETF redemptions and dollar long scenarios, it could take gold to $3900. Now the tactical volatility is offering entry points rather than exit signals.
The World Gold Council reported 220 tons purchased in Q3 — a 28% jump from the prior quarter — bringing total official sector buying to 634 tons this year. Over the next quarter, continued central bank accumulation (A price-agnostic accumulation ) could allow a retest of highs. Western sanctions have reinforced the desire of central banks to diversify away from the U.S. dollar (avoiding the dollar concentration risk). Ballooning federal debt, fiscal deficits and the ongoing US government shutdown further boost gold's role as a safe-haven asset amid weakening U.S. fundamentals. Due to the Central Banks official accumulation, gold could get a floor price each time of position unwinding happened.
A combination of factors like rising interest rates, stronger US dollar, stronger global economy, diminishing geo-political conflicts and reduced central bank purchases could trigger bearishness (which is unlikely). Shifting flow of money from gold to other risky assets could trigger a selling spree in gold.
US CPI data being the next catalyst, the volatility remains, with current prices of COMEX & MCX hovering at $4032 or Rs.122000 for Gold and $48.80 or Rs.149900 for Silver,
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