This has been the most interesting week for the shinning metal to say the least as the winning bull run faced its biggest challenge. The price is set to close the week well in red but also above the lows of the week. Gold traders are now certainly in a difficult place given the massive run that we have seen this year for the shinning metal’s price.
Price Action
At the start of trading session today, gold futures traders with a plenty of caution and the price action has been volatile. The price formed the low of 4044 and the high of the day was 4129. Today’s low which was triggered on the back of the CPI data, was lower than the yesterday lows, but at the time of writing this article, the price traded near the high of the day but below the high of yesterday. This has confirmed one thing very clearly, that the bulls are losing control of the price action as we have a lower low as compared to the yesterday and the price didn’t challenge the yesterday’s high. But many believes in the market that the price is showing a lot of resilience and we are likely to see much more positive price action for the shinning metal.
Gold trading chart by XTB
The Main Event
The most important economic data for the week was released, the US CPI number. It appears from today’s release of the Consumer Price Index (CPI) that core CPI actually rose 0.2% on a monthly basis, thus missing consensus estimates of 0.3% in the process, while the headline number rose 0.3% for the month (vs 0.4% consensus estimates for an uptick), yet also came in 3% for the year (vs 3.1% consensus estimates), thus softer nonetheless. So, the overall data has plenty of mix messages for traders and both bulls and bears can argue for their case as we head towards the main event of the week which is the FOMC meeting.
Given the fact that the m/m number has fallen, many traders believes that it is highly likely that the Fed will lower the interest at least two more times and that means an interest rate cut of 50 basis points. The base case for the market now is that going into the next week meeting, the interest rate cut of 25 basis points is very much a done deal. So this means that we may not see much of reaction if the Fed’s commentary doesn’t deliver any meaningful colour and that means there is no massive dovish tone there.
Beyond Economic Data
Gold prices doesn only move on the back of the US economic data but there are many other geopolitical factors that play an active role here. Recent statements made by US President Donald Trump in the last 48 hours have unsettled market risk, including his stance on re-emphasizing high tariff charges on Chinese imports from November 1st, his allegations against Venezuela for their complicity in the illicit shipment of fentanyl into the US, in addition to his army threats in Latin America, which have escalated the anticipation for global turmoil at a time when the US government is also encountering a possible government shutdown. Additionally, the White House confirmation of the meetings between US President Donald Trump, President Xi of China, and the newly elected Japanese Prime Minster have further added to the uncertain state associated with global policies.
The Play Book
However, risks remain. Should global macro data surprise to the upside—particularly in Eurozone or U.S. services activity—it could lift the dollar and Treasury yields, placing downward pressure on non-yielding assets like gold. But the fragile sentiment around the U.S. government’s fiscal health, which remains clouded by the unresolved shutdown and Senate gridlock over worker pay, limits confidence in risk assets. With volatility lingering across bond markets and equity leadership narrowing, gold stands out as a structural hedge against market fragility. At Zaye Capital Markets, we believe the ongoing demand for protection—both from inflationary risks and geopolitical turbulence—continues to create a bid floor beneath gold, even as technical pullbacks play out. In summary, the confluence of softer inflation readings, rising international tensions, and an increasingly uncertain U.S. policy stance is providing a positive macro mix for gold prices.
Given the pending FOMC meeting, escalation in Trump’s tariff policies, and an unstable fiscal state in the U.S., it appears that gold could re-test its recent highs if uncertainties continue to rise in the coming days. At present, the recent prices near $4,140 represent a re-calibration rather than a reversal in the trend, for which we remain positive in the medium term. The important price levels are mentioned on the chart above.