Gold breaks its upward trend for the second time in three days! The Fed's early morning meeting minutes may cause a big shock.
2025-10-08 18:46:32
Gold prices continued to hit new all-time highs during the first half of the European trading session on Wednesday (October 8th), reaching as high as $4,040 within the past hour and currently trading at $4,035.08 per ounce. Market expectations for further Federal Reserve rate cuts continue to strengthen, driving capital flows into non-interest-bearing gold. Furthermore, growing concerns about the potential economic impact of a prolonged US government shutdown, coupled with a slight deterioration in global risk appetite, have become another key factor supporting safe-haven gold.
Meanwhile, the US dollar's climb to its highest level since late August hasn't diminished gold's resilient bullish outlook. More notably, bullish traders have largely ignored extremely overbought signals on short-term charts, suggesting that the path of least resistance for gold prices remains to the upside. Traders are currently focused on the Federal Open Market Committee (FOMC) meeting minutes, due tomorrow morning. Additionally, Fed Chairman Jerome Powell will deliver a speech on Thursday, both of which are expected to hint at a possible interest rate cut, injecting new momentum into the precious metal.
The US government shutdown has entered its second week, with Republicans and Democrats digging their heels in, and signs of a funding deal fading. The impasse not only heightens market uncertainty but also threatens to materially hinder US economic performance amidst an uncertain global trade outlook.
The Federal Reserve's planned monetary easing cycle in September, coupled with market bets on further rate cuts, continues to provide positive support for non-interest bearing gold. In fact, current trader pricing already reflects a significantly increased probability of the US central bank cutting interest rates by 25 basis points each in October and December.
According to data from the World Gold Council, the scale of funds flowing into gold ETFs has reached a record high of US$64 billion so far this year, and the monthly inflow of gold ETFs in September hit a peak in more than three years.
This data clearly demonstrates the growing urgency among investors seeking safe-haven assets to hedge against potential market shocks. The continued strong rise in gold prices has not deterred central banks worldwide from increasing their gold holdings – they are diversifying their foreign exchange reserves and reducing their reliance on US debt. The latest data shows that global central bank gold reserves increased by a net 15 tons in August, with the National Bank of Kazakhstan leading the increase.
At the same time, U.S. COMEX gold inventories and iShares gold holdings both hit recent highs.
The US dollar climbed to its highest level since August 25, buoyed by the generally weaker yen and euro, while the yen and euro continued to be suppressed by domestic political uncertainty. However, the strengthening dollar did not impact the strong bullish sentiment for gold, nor did it stop its current upward momentum.
Market focus has now shifted entirely to the FOMC meeting minutes, due to be released later today. Furthermore, Thursday's speech by Federal Reserve Chairman Jerome Powell will also be a key focus, with investors hoping to gain further clarity on the path of interest rate cuts. This information will, in turn, influence the US dollar and provide renewed momentum for the USD/Gold exchange rate.
On Wednesday, the price of gold continued to hold above the $4,000 mark. This trend means that the gold price has broken through the rising channel twice in the past three trading days. These are also the three trading days with the fastest growth rate in this wave of increases. This acceleration undoubtedly means that this is the recent sentiment high point for gold prices, and sentiment high points are all cost-effective points for taking profits.
(Spot gold daily chart, source: Yihuitong)
Belgian metal recycling group Umicore announced on Wednesday that it has decided to sell approximately €410 million in gold inventory, capitalizing on record-high gold prices. Both spot and futures gold prices reached over $4,000 per ounce, reaching new all-time highs. Umicore stated in a statement that it will sell and lease gold inventory held by its Jewelry & Industrial Metals business unit and its Precious Metals Refining division. The sale is expected to generate an after-tax capital gain of €370 million and contribute approximately €480 million to earnings before interest, taxes, depreciation, and amortization.
Furthermore, gold prices have so far remained unconstrained by overbought conditions on short-term charts, further confirming that the clear upward trend established over the past two months or so is expected to continue.
Meanwhile, if gold prices experience a correction and fall below the $4,000 mark, the $3,975 level will likely provide strong support and attract new buying. However, a clear break below this support level could trigger some long positions to close, dragging gold prices down to the next key support level of $3,948-3,947. If the decline continues, it could potentially test the support level of the ascending channel, near $3,900.
At 18:43 Beijing time, spot gold was trading at $4036.76 per ounce.
Meanwhile, the US dollar's climb to its highest level since late August hasn't diminished gold's resilient bullish outlook. More notably, bullish traders have largely ignored extremely overbought signals on short-term charts, suggesting that the path of least resistance for gold prices remains to the upside. Traders are currently focused on the Federal Open Market Committee (FOMC) meeting minutes, due tomorrow morning. Additionally, Fed Chairman Jerome Powell will deliver a speech on Thursday, both of which are expected to hint at a possible interest rate cut, injecting new momentum into the precious metal.
Daily Market Update: Amidst economic uncertainty, expectations of a Fed rate cut are driving gold prices
The US government shutdown has entered its second week, with Republicans and Democrats digging their heels in, and signs of a funding deal fading. The impasse not only heightens market uncertainty but also threatens to materially hinder US economic performance amidst an uncertain global trade outlook.
The Federal Reserve's planned monetary easing cycle in September, coupled with market bets on further rate cuts, continues to provide positive support for non-interest bearing gold. In fact, current trader pricing already reflects a significantly increased probability of the US central bank cutting interest rates by 25 basis points each in October and December.
According to data from the World Gold Council, the scale of funds flowing into gold ETFs has reached a record high of US$64 billion so far this year, and the monthly inflow of gold ETFs in September hit a peak in more than three years.
This data clearly demonstrates the growing urgency among investors seeking safe-haven assets to hedge against potential market shocks. The continued strong rise in gold prices has not deterred central banks worldwide from increasing their gold holdings – they are diversifying their foreign exchange reserves and reducing their reliance on US debt. The latest data shows that global central bank gold reserves increased by a net 15 tons in August, with the National Bank of Kazakhstan leading the increase.
At the same time, U.S. COMEX gold inventories and iShares gold holdings both hit recent highs.
The US dollar climbed to its highest level since August 25, buoyed by the generally weaker yen and euro, while the yen and euro continued to be suppressed by domestic political uncertainty. However, the strengthening dollar did not impact the strong bullish sentiment for gold, nor did it stop its current upward momentum.
Market focus has now shifted entirely to the FOMC meeting minutes, due to be released later today. Furthermore, Thursday's speech by Federal Reserve Chairman Jerome Powell will also be a key focus, with investors hoping to gain further clarity on the path of interest rate cuts. This information will, in turn, influence the US dollar and provide renewed momentum for the USD/Gold exchange rate.
Technical Analysis:
On Wednesday, the price of gold continued to hold above the $4,000 mark. This trend means that the gold price has broken through the rising channel twice in the past three trading days. These are also the three trading days with the fastest growth rate in this wave of increases. This acceleration undoubtedly means that this is the recent sentiment high point for gold prices, and sentiment high points are all cost-effective points for taking profits.
(Spot gold daily chart, source: Yihuitong)
Belgian metal recycling group Umicore announced on Wednesday that it has decided to sell approximately €410 million in gold inventory, capitalizing on record-high gold prices. Both spot and futures gold prices reached over $4,000 per ounce, reaching new all-time highs. Umicore stated in a statement that it will sell and lease gold inventory held by its Jewelry & Industrial Metals business unit and its Precious Metals Refining division. The sale is expected to generate an after-tax capital gain of €370 million and contribute approximately €480 million to earnings before interest, taxes, depreciation, and amortization.
Furthermore, gold prices have so far remained unconstrained by overbought conditions on short-term charts, further confirming that the clear upward trend established over the past two months or so is expected to continue.
Meanwhile, if gold prices experience a correction and fall below the $4,000 mark, the $3,975 level will likely provide strong support and attract new buying. However, a clear break below this support level could trigger some long positions to close, dragging gold prices down to the next key support level of $3,948-3,947. If the decline continues, it could potentially test the support level of the ascending channel, near $3,900.
At 18:43 Beijing time, spot gold was trading at $4036.76 per ounce.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
