October 31, 2025 : Gold prices trimmed early losses on Thursday, regaining a bit of ground after a soft start to the trading session. However, analysts believe the metal’s upside remains capped as the US dollar continues to strengthen and investors scale back expectations of early rate cuts from the Federal Reserve.
The global gold market has entered a consolidation phase after weeks of volatile moves. Prices have recently retreated from record highs as investors rotate towards riskier assets amid easing geopolitical tensions and stronger economic indicators from the United States.
Dollar strength weighs on gold
A stronger US dollar index, hovering near multi-month highs, remains the primary headwind for gold. Since gold is priced in dollars, a firmer greenback makes the metal more expensive for overseas buyers, reducing demand. Meanwhile, US bond yields have stayed elevated following the Fed’s cautious stance, further limiting the appeal of non-yielding assets like gold.
Market watchers suggest that until the dollar weakens decisively, gold is unlikely to sustain a sharp rally. Traders are now closely monitoring upcoming US economic data releases — including inflation and non-farm payrolls — for clues about the Fed’s next policy move.
Technical outlook
On the technical front, gold continues to face resistance around the $4,050–$4,075 per ounce range. If the price manages to clear this zone, analysts expect it could test the next major level near $4,100. Conversely, immediate support lies near $3,950, followed by a deeper floor around $3,900 per ounce.
A decisive break below $3,900 could signal a short-term correction, while a move above $4,075 would strengthen the case for renewed bullish momentum. Traders remain cautious, preferring range-bound strategies such as buying near support and booking profits near resistance.
Indian market update
In India, gold futures mirrored global trends, trading slightly lower around ₹1.19 lakh per 10 grams. The fall was attributed to the strong US dollar and a mildly appreciating rupee. Domestic prices have been fluctuating in a narrow band as festive season demand provides partial support to an otherwise sluggish global outlook.
Jewellers and investors in India are watching the rupee closely, as currency movements directly affect import costs. A stronger rupee typically makes imported gold cheaper, exerting additional pressure on domestic prices.
Factors influencing gold prices
Several global factors are influencing the current price trend of the yellow metal:
- Federal Reserve Policy: The Fed’s recent comments have dampened hopes of near-term rate cuts. Higher interest rates increase the opportunity cost of holding gold, which offers no yield.
- Real Yields: Inflation-adjusted returns on US government bonds remain high, diverting investor interest away from gold.
- Safe-Haven Demand: With global tensions easing slightly and equity markets stabilising, investors are moving back toward risk assets, reducing the need for traditional safe havens.
- Oil Prices: A dip in crude oil prices has softened inflation expectations, reducing the urgency for investors to hedge through gold.
- China’s Demand: A slowdown in China’s gold purchases has also weighed on global sentiment.
Market sentiment
Despite the short-term pressure, many analysts believe the long-term outlook for gold remains stable. Persistent global debt levels, moderate inflation, and ongoing geopolitical uncertainties continue to lend support to the metal.
However, the market consensus suggests that any major breakout will depend on a reversal in the dollar trend or a clear signal from the Federal Reserve about rate cuts in 2026. Until then, gold is expected to trade sideways with a mildly bearish bias.
Traders and investors are advised to stay cautious, maintaining strict stop-loss levels on short-term positions. For long-term portfolio diversification, experts still consider gold a valuable hedge against inflation and currency volatility.
Expert view
Market strategists say the recent pullback in gold should not come as a surprise given the strong performance of the US economy. As long as growth data stays robust and inflation moderates, the dollar is likely to remain supported — putting pressure on gold.
In the absence of major geopolitical shocks or sudden rate cuts, the metal may continue oscillating within a narrow range. Short-term traders might find limited opportunities, while long-term investors could view dips as gradual accumulation zones.
Outlook
Looking ahead, the short-term trajectory of gold will depend largely on how the US dollar and Treasury yields behave. If inflation data comes in softer than expected, the metal could find renewed buying interest. Conversely, any signs of a hawkish Fed or stronger US economic growth will keep prices under check.
For now, gold’s momentum appears muted, with more evidence suggesting consolidation rather than a fresh rally. Traders are likely to remain defensive, focusing on global macro indicators before taking directional bets.
Summary
Gold recovered slightly after early losses but faces limited upside as a strong US dollar, firm bond yields, and easing safe-haven demand keep investors cautious amid global economic stability.