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2025-10-31 10:31:37
Gold prices retreated slightly as the dollar held firm amid hawkish Fed stance. 1. Spot gold weakened slightly in Asian trading on Friday, currently trading around $4012.5 per ounce, down about 0.2%, as hawkish signals from the Federal Reserve dampened expectations of a December rate cut. The dollar hit a near three-month high on Thursday, and the dollar index fluctuated around that level on Friday, putting pressure on gold prices. However, factors such as the prolonged US government shutdown continued to provide support for gold prices. 2. Growing market concerns about the impact of a prolonged US government shutdown on economic performance limited the dollar's rise to its highest level since early August following the Fed's decision and dampened investor sentiment. This, in turn, became a key tailwind supporting safe-haven gold. However, the Fed's hawkish stance deterred gold bulls from making large bets. 3. The Fed cut its benchmark overnight lending rate to a range of 3.75%-4% on Wednesday and indicated it would stop reducing its balance sheet as early as December, marking the end of its quantitative tightening program. Meanwhile, Federal Reserve Chairman Jerome Powell stated that a further rate cut at the December meeting is not a certainty. This is beneficial for dollar bulls and limits the upside potential of non-yielding gold. 4. In addition, the latest optimism stemming from easing trade tensions between the US and China—the world's two largest economies—also helped to suppress gold prices. 5. Analysts point out that before confirming the end of the recent sharp pullback after reaching the all-time high earlier this month and positioning for any meaningful short-term appreciation, it is prudent to wait cautiously for strong follow-through buying.
