Gold prices are currently fluctuating between $3,900 and $4,050. This range is influenced by a cautious Federal Reserve approach and a stronger US Dollar. The Fed’s choice to keep interest rates steady has strengthened the dollar, which limits gold’s potential for higher prices. In October, the ISM Manufacturing PMI dropped to 48.7, marking eight months of decline and impacting market sentiment. China’s reduced VAT exemption on gold purchases, from 13% to 6%, has also affected the mood in the largest bullion market. On a positive note, a new trade agreement between the US and China offers some concessions and may ease trade tensions. Meanwhile, a US government shutdown is ongoing, now entering its 33rd day, further delaying important economic data.

Gold’s Technical Overview

Gold’s price remains stable around $4,000, influenced by key Simple Moving Averages. The RSI shows a neutral trend, indicating a lack of clear direction in the market. Gold is often seen as a safe investment during uncertain times. Central banks, particularly in emerging markets, are boosting their reserves. Because gold often moves in the opposite direction to the US Dollar and Treasuries, it tends to respond to geopolitical events and interest rate changes. A strong dollar typically keeps gold prices down, while a weaker dollar can support gold. As of November 3, 2025, gold is stuck in a narrow range between $3,900 and $4,050. The stronger US Dollar, following the Fed’s signal that interest rates are unlikely to drop this year, is diminishing gold’s appeal as a non-yielding asset. Last week’s hawkish stance from the Fed greatly changed market expectations. According to the CME FedWatch Tool, the chance of a rate cut at the December 2025 meeting has dropped from over 60% to just under 30%. Traders should be cautious when considering far out-of-the-money call options until this sentiment shifts. Despite these pressures, some signs of economic weakness may support gold prices in the medium term. The US ISM Manufacturing PMI has been in decline for eight months—similar to a previous trend seen in 2023-2024. The ongoing 33-day government shutdown, approaching the 35-day record from late 2018, raises concerns about a deeper economic slowdown.

Chinese Influence and Volatility Trends

While the new Chinese tax on gold purchases is a challenge for retail buyers, demand from institutions remains strong. The People’s Bank of China added 23 tonnes in the third quarter of 2025, according to recent data from the World Gold Council. This consistent buying from central banks should help support gold prices. The price stabilization has lowered the Gold Volatility Index (GVZ) to around 12, its lowest in months. This low-volatility setting is preferable for traders looking to profit from options strategies like strangles, assuming gold stays within the $3,900-$4,050 range. Traders should keep a close eye on these levels, as a breakout in either direction could lead to significant price movements. Create your live VT Markets account and start trading now.

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