The precious metal continues to power through ceilings and climb higher and higher as investors flee enmasse towards safety amid geopolitical, economic and policy uncertainties. The bullion has surpassed the $4000 per troy ounce historic level in today’s early trading hours and its year-to-date gain exceeded 50%.

Political instability in France, leadership change in Japan, ongoing war between Russia and Ukraine in Easter Europe, the conflict in Middle East between Israel and Hamas, but also the fragmentation and multipolarization of relationships between the forces of the East and West, have been the themes of 2025 that sustained the “fear premium” trade, lifting gold’s prices higher.

On the monetary policy front, central banks have switched into policy easing mode as inflation no longer poses a threat and economies need extra breathing room for harsh rates, in order to return back to growth.

In the US, the Federal Reserve will most likely proceed with a 25-bps rate reduction at the policy meeting on the 29th of October and lower the federal funds rate to 4%, even though neither policymakers nor market participants have information about the performance of the US labour market in September. The Non-Farm Payrolls report release was postponed until further notice, since many US government services were shut down late last week.

The shutdown has now entered its second week with no bipartisan resolution looming in the horizon for the time being, which adds another bullish tilt for the shiny metal.

Central banks also continue to shore up more and more bullion for their reserves and analysts expect that the enhanced allocation will remain as the most prominent structural driver of gold prices in the foreseeable future.

Finally, global central banks seek to reduce their dependency on the U.S. dollar as a reserve currency and consequently their vulnerability to President Trump’s unpredictable U.S. tariff policies, striving to capture more market share of the precious commodity as a hedge. The devaluation of the dollar at the same time, makes gold purchases from emerging market central banks’ much more affordable, creating a positive feedback loop.

Technical Analysis

Gold Chart – The shiny metal extends year-to-date gain to more than 50% as bullish catalysts converge

Resistance: 4050 (R1), 4100 (R2), 4150 (R3)
Support: 3940 (S1), 3890 (S2), 3820 (S3)