Gold prices experienced a rebound as investors sought refuge amid a decline in global stock markets, which fell due to concerns about high valuations. Spot gold increased toward $4,000 an ounce following a nearly 2 percent drop in the previous session, coinciding with a rise in the U.S. dollar for the fifth consecutive day. Global equities faced a downturn on Wednesday, reflecting the most significant decline in nearly a month, while U.S. Treasuries also experienced gains as investors turned to safe-haven assets.
The drop in gold prices on Tuesday occurred when three Federal Reserve officials expressed reservations about endorsing an additional interest-rate cut in December, considering the conflicting risks posed by inflation and a weakening labor market. Investors are poised to receive further insights this week, particularly from St. Louis Fed President Alberto Musalem.
Year-to-date, gold has seen a 50 percent increase, reaching a record price last month before retracting some of its gains. This recent pullback was triggered by multiple indicators suggesting that the rapid increase in prices may have been unsustainable, resulting in withdrawals from bullion-backed exchange-traded funds. Traders are now evaluating whether the decline in gold prices has reached its conclusion.
“Given the current circumstances, it shouldn’t be surprising to see gold consolidate in a trading range of $3,800 to $4,050 an ounce,” stated Bart Melek, a strategist at TD Securities, in a recent note. He highlighted uncertainties related to the Federal Reserve’s trajectory on interest rate cuts and concerns about retail buying activity in China.
Nonetheless, the underlying factors driving gold’s appreciation this year remain largely intact. Elevated purchasing from official sectors and robust demand from private investors are expected to push prices higher following the consolidation phase, Melek added.
As of 12:27 p.m. in Singapore, gold was up 0.8 percent, priced at $3,963.87 an ounce. The Bloomberg Dollar Spot Index remained steady after reaching its highest level since mid-May. Silver also saw an increase of 0.8 percent, while palladium showed slight gains.
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Published on November 5, 2025
