Gold continues to be resilient amid a volatile economic landscape, reclaiming ground above the $4,000-per-ounce mark after enduring a two-week decline. With ongoing debate over U.S. interest rate policy, shifting trade dynamics, and global risk-off sentiment, gold prices have entered a phase of recovery and consolidation, signaling that the broader bullish trend may still be intact despite recent turbulence.
Spot gold edged higher early Monday, climbing 0.3% to $4,014.18/oz, with U.S. gold futures also advancing 0.7% to $4,025.50/oz. After shedding over 2% last week, this modest rally highlights gold's attempt to regain strength. October had seen signs of recovery, with prices advancing nearly 4% for the month despite back-to-back weekly losses late in the period.
The recent rebound marks a return of cautious buying after a sharp sell-off pulled prices from their all-time high of $4,381 less than three weeks ago. Gold’s sharp fall was driven in part by investors booking profits and recalibrating expectations after an intense rally. While prices dipped as low as $3,900, analysts now expect gold to trade sideways in a consolidation range between $3,800 and $4,050 an ounce.
Gold’s performance in recent weeks has been closely tied to investor sentiment surrounding U.S. monetary policy. Although the Federal Reserve trimmed interest rates by 25 basis points last week, which is typically bullish for non-yielding assets like gold, Fed Chair Jerome Powell’s comments that further easing is “not a foregone conclusion” have tempered optimism.
Markets have responded by reducing the odds of another rate cut in December, with the CME FedWatch Tool showing a decline in expectations from 69% to 62%. Stronger-than-expected economic data, such as a 42,000 rise in private payrolls and a firm ISM Services PMI reading of 52.4, have added to speculation that the Fed may pause its easing cycle. A more cautious Fed stance and robust labor market data have helped push the dollar to near three-month highs, weighing on gold and capping further gains.
Adding to gold’s short-term drag is the easing of trade tensions between the U.S. and China, following a high-level meeting between Presidents Donald Trump and Xi Jinping in Osaka. The summit ended with mutual pledges to lower trade barriers, a move that soothed investor fears and reduced safe-haven demand for gold. Meanwhile, in a move likely to impact Chinese gold consumption, authorities announced the end of a VAT offset program for gold bought via the Shanghai Gold Exchange. This will make gold purchases more expensive for Chinese consumers and is expected to somewhat dampen retail demand in one of the world’s biggest gold markets.
Despite shorter-term softness, gold's long-term outlook remains bullish. Analysts highlight a technical breakout earlier in 2024, when the precious metal decisively breached a decade-long resistance level dating back to 2011. This violation of multi-year resistance signaled the start of a new bull market phase, supported by increasing institutional interest and long-term capital inflows.
The steepening upward price trend and a rising structural support line that has held since the early 2000s provide a strong technical foundation for further gains. While the current correction has brought gold back into a consolidation zone, analysts see potential for a continuation of the rally, possibly toward the $4,400 to $5,000 range as long as structural dynamics remain intact.
Gold’s recent choppy performance also reflects evolving market sentiment. According to A-Mark Precious Metals CEO Greg Roberts, retail investors have taken a “breather” following a prolonged buying spree, reassessing how much of 2025’s narrative rate cuts, fiscal stress, geopolitical hedging, and central bank demand is already priced in.
Total gold ETF holdings, an indicator of institutional and retail interest, recorded two consecutive weeks of outflows in late October. However, analysts believe these are temporary, pointing to sustained central bank purchases and long-term investor demand as key drivers that will likely reassert themselves once current uncertainties dissipate.
While gold regains ground, other commodities are navigating different headwinds. Silver hovered around $47.60 per ounce, about 4% above its recent low, while platinum and palladium also firmed. Oil prices, however, remained under pressure amid weak manufacturing data from China and the U.S., a stronger dollar, and growing concerns over oversupply. Base metals like copper, zinc, and aluminum saw limited movement, entering a phase of cautious consolidation.
Gold's recent rebound reflects a market in transition, one seeking clarity on central bank policy and geopolitical developments. While strong U.S. economic data and a firmer dollar present headwinds, longer-term structural trends, technical resilience, and continued demand from institutions and central banks keep the bullish case for gold alive. In a world defined by uncertainty, gold’s role as a safe-haven asset remains as relevant as ever. Now more than ever, knowing when to move and having the insights to back your decisions can make all the difference.