Gold prices stabilized following a three-day decline, as buyers returned ahead of a widely expected interest rate cut from the Federal Reserve. The precious metal held near $3,950 per ounce after experiencing a drop of more than 4% over the past three sessions. Market analysts predict a 25-basis-point reduction, though Fed Chair Jerome Powell is expected to provide limited forward guidance. Lower borrowing costs typically favor bullion, which does not bear interest.
The recent retreat follows a significant rally that saw gold reaching record highs above $4,380 per ounce last week. Technical analysis indicated that the rapid price increase had outpaced reasonable valuations, coinciding with diminished demand for safe-haven assets amid signs of improvement in US-China trade relations.
With US President Donald Trump scheduled to meet with Chinese President Xi Jinping, Trump commented on the upcoming summit, expressing optimism for a favorable outcome for both nations and the global economy.
Despite the recent pullback, gold remains approximately 50% higher year-to-date, bolstered by central bank purchases and what is referred to as the debasement trade, which sees investors shifting away from sovereign debt and currencies in favor of gold amid growing budget deficits.
The surge in gold prices attracted both institutional and retail investors to gold-backed exchange-traded funds (ETFs); however, this week’s outflows have somewhat undermined that trend. According to Bloomberg data, investors withdrew a net $1 billion from State Street’s SPDR Gold Shares on Monday—the largest outflow since April. This withdrawal contributed to a broader decline in total investor holdings of gold ETFs, marking the largest drop in six months.
“Gold’s role as a portfolio hedge against fiscal and policy uncertainty remains undiminished, though short-term exuberance has clearly given way to consolidation,” stated Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. He added that consolidating within the $3,920 to $4,020 range could lay the groundwork for further price increases. Conversely, failing to maintain that range could lead to additional sell-offs.
The recent fluctuations in gold prices and their implications have been a major topic at the London Bullion Market Association’s precious metals conference in Kyoto, Japan. Attendees remained generally optimistic, with a survey of 106 participants forecasting that gold could trade at nearly $5,000 per ounce within the next year.
As of 10:35 a.m. in Singapore, spot gold was priced at $3,950.66 per ounce, while the Bloomberg Dollar Spot Index registered a 0.1% increase. Silver prices rose for a second consecutive day, whereas both platinum and palladium saw declines.
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Published on October 29, 2025.
