Gold Prices Retreat Amid Profit-Taking and Eased Trade Tensions
Gold Prices Retreat Amid Profit-Taking and Eased Trade Tensions
On October 28, 2025, gold prices experienced a notable decline, retreating from recent record highs. This movement is primarily attributed to profit-taking by investors and a slight easing in U.S.-China trade tensions.
Market Overview
Gold futures for December delivery (GCZ25) closed at $3,983.10 per ounce, marking a 0.91% decrease from the previous session. This pullback follows a period of significant gains, with gold prices having surged over 60% year-to-date, driven by geopolitical uncertainties and expectations of Federal Reserve rate cuts.
Macroeconomic Drivers
- U.S.-China Trade Relations: Recent comments from President Donald Trump indicating a potential meeting with Chinese President Xi Jinping have alleviated some trade tensions. This development has bolstered risk appetite, leading investors to shift away from safe-haven assets like gold. Source
- Federal Reserve Policy: The Federal Open Market Committee (FOMC) commenced its two-day meeting today, with market participants anticipating a dovish stance. The dollar index (DXY) fell slightly by 0.12%, reflecting expectations of potential rate cuts. Source
Technical Analysis
From a technical perspective, gold's recent decline can be viewed as a correction within a broader bullish trend. The Relative Strength Index (RSI) has retreated from overbought territory, suggesting that the market is consolidating after recent gains. Key support levels to monitor include $3,950 and $3,900 per ounce, while resistance is observed near the recent high of $4,218.
Investor Sentiment
Investor sentiment remains cautiously optimistic. While the recent pullback has prompted some profit-taking, the underlying factors that have driven gold's ascent—such as geopolitical uncertainties and central bank policies—persist. Additionally, other precious metals have mirrored gold's movements, with silver futures (SIZ25) rising by 1.18% to $47.324 per ounce, indicating sustained interest in the sector.
Conclusion
In summary, the recent decline in gold prices is largely a result of profit-taking and a temporary easing in trade tensions. However, the fundamental drivers supporting gold's long-term bullish outlook remain intact. Investors are advised to monitor upcoming economic data releases and central bank communications for further insights into the precious metals market.
