"In the early sessions of November, gold prices continued to hover around the US$3,980-4,000/oz range, reflecting the tug-of-war between a strong U.S. dollar and renewed safe-haven demand. After a prolonged rally, the U.S. Dollar Index (DXY) approached the 100 level - it's highest since early August - before retreating slightly to around 99.6. This movement suggests that the foreign exchange market is pausing after a period of dollar strength, although the fundamental pressure on gold has yet to ease."
"Following its late-October meeting, the Fed cut interest rates by 25 basis points, bringing the target range down to 3.75%-4.00%, but Chair Jerome Powell emphasized that this was not the start of an aggressive easing cycle. His comments reinforced expectations that interest rates will stay elevated for an extended period, keeping the 10-year U.S. Treasury yield steady around 4.1%. In this environment, the opportunity cost of holding gold continues to rise."
"At present, the USD is showing mild weakness as the DXY reacts to the 100 threshold, providing a temporary advantage for gold. However, to establish a more sustained upward trend, gold would need stronger support from safe-haven flows, which have become increasingly sensitive to recent geopolitical developments. According to Axios (Nov 5), Russian President Vladimir Putin has instructed the defense ministry to prepare plans for a potential resumption of nuclear testing, following U.S. President Donald Trump's statement."
Gold trades around US$3,980–4,000/oz as a firm U.S. dollar competes with renewed safe-haven demand. The U.S. Dollar Index approached 100 then eased to about 99.6, suggesting a pause in dollar strength while fundamental pressure on gold endures. The Federal Reserve cut rates by 25 basis points to a 3.75%–4.00% target but signaled that cuts do not begin an aggressive easing cycle. Ten-year Treasury yields stay near 4.1%, increasing the opportunity cost of holding gold. Mild USD weakness offers temporary support, but sustained gold gains need stronger safe-haven flows amid rising geopolitical tensions. Russian plans to prepare for potential nuclear testing after U.S. remarks have kept markets cautious, sustaining some demand for gold.
Read at London Business News | Londonlovesbusiness.com
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