Fed rate cut, weaker dollar keep gold’s safe-haven appeal intact

Gold prices rose nearly 1% on Thursday, supported by a weaker dollar and the latest interest rate cut from the U.S. Federal Reserve, while progress in U.S.–China trade talks limited further gains.

1. Gold Climbs as Dollar Retreats and Fed Cuts Rates Again

During the Asian trading session on October 30, 2025, spot gold rose 0.6% to $3,953.04 per ounce as of 05:29 GMT, according to Reuters.
Meanwhile, December gold futures on COMEX slipped 0.9% to $3,964.50 per ounce.

The main driver behind gold’s rise was the decline in the U.S. dollar following the Federal Reserve’s decision to cut interest rates by another 25 basis points, bringing the target range down to 3.75%–4% — the lowest level in more than two years.
Lower borrowing costs typically make non-yielding assets like gold more attractive.

Jim Wyckoff, senior analyst at Kitco Metals, commented:

“With the Fed continuing to lower interest rates, real yields fall, and that makes gold more appealing to investors. However, sentiment remains cautious amid mixed geopolitical and trade signals.”

2. Fed Hints at Possible Pause, but Gold Remains Supported

Although the Fed opted for another rate cut, Chair Jerome Powell said a further reduction in December “is not a sure thing,” suggesting that the central bank may pause its easing cycle.
Still, with inflation subdued and global growth slowing, analysts believe gold will maintain its safe-haven status in the current uncertain environment.

Edward Moya, senior analyst at OANDA, noted:

“Even if the Fed pauses, the U.S. economy is still in a period of slower growth. Gold will remain a beneficiary if financial or political risks escalate.”

At the same time, the U.S. dollar slipped 0.4% against a basket of major currencies, making gold — which is priced in dollars — cheaper for foreign investors and helping sustain demand.

3. U.S.–China Trade Progress Caps Gold’s Upside

Beyond the Fed’s policy decision, gold prices were also influenced by signs of progress in trade negotiations between the U.S. and China.
The meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Busan, South Korea, reportedly yielded a “basic framework agreement” to ease trade tensions — a development that reduced demand for safe-haven assets and capped gold’s rally.

As optimism grew, investors began shifting capital back into equities and industrial commodities, while maintaining neutral positions in gold.

John Sharma, economist at National Australia Bank (NAB), explained:

“Markets are balancing two forces: the Fed’s rate cuts, which support gold, and improving U.S.–China trade relations, which dampen safe-haven demand. The result is price stability around the $3,950 mark.”

4. Investors Stay Cautious Ahead of New Economic Data

Despite the steady uptrend, analysts warned of short-term volatility as markets digest the Fed’s latest move.
If upcoming U.S. data show rising inflation or a stronger labor market, the Fed may pause rate cuts entirely, potentially putting pressure on gold.
Conversely, continued global weakness would likely drive fresh inflows into gold, silver, and government bonds.

According to the Bloomberg Commodity Index, gold trading volumes have risen 12% this week compared to the three-month average, signaling heightened defensive positioning among investors preparing for potential market swings.

5. Outlook: Gold Could Approach $4,000 by Year-End

Major financial institutions expect gold’s upward momentum to continue through Q4 2025, as investors remain cautious amid policy uncertainty and global instability.

Citigroup projects an average gold price of $3,980 per ounce for the fourth quarter, supported by lower real yields and persistent geopolitical risks.

JP Morgan maintains a “mildly bullish” view, forecasting a trading range between $3,900 and $4,050 per ounce, unless the Fed drastically shifts its policy stance.

ANZ Research adds that “with both real yields and the dollar declining, gold could break above $4,100 per ounce in the most optimistic scenario.”

However, the rally may face temporary resistance if U.S.–China trade talks make significant progress, reducing the need for safe-haven positioning among global investors.

6. Conclusion: Gold Holds Its Ground Amid Global Uncertainty

While easing trade tensions may temper risk aversion, gold continues to shine as a reliable hedge in an era of shifting monetary policies and geopolitical flux.
With a weaker dollar, lower interest rates, and lingering uncertainty, analysts see gold as well-supported in the medium term.

Bart Melek, head of commodity strategy at TD Securities, summarized:

“Gold reflects the market’s global caution. Every time the Fed turns cautious — or geopolitical risks flare up — gold reasserts its role as the asset investors trust most.”

FAQs

Q1: Why did gold prices rise on October 30?
A1: Gold gained because the U.S. dollar weakened and the Fed cut interest rates again, boosting demand for the non-yielding precious metal.

Q2: Will the Fed cut rates again in December?
A2: Fed Chair Jerome Powell said another rate cut “is not certain.” The Fed will monitor upcoming inflation and labor data before making any further decisions.

Q3: How do U.S.–China trade talks affect gold prices?
A3: When trade tensions ease, investors reduce their holdings in safe-haven assets like gold, which can limit the metal’s upside potential.

Q4: What is the year-end outlook for gold?
A4: Analysts expect gold to approach $4,000 per ounce by the end of 2025, supported by low interest rates, a weaker dollar, and persistent global uncertainty.