Gold Loses Ground, Yen Weakens (10.23.2025)

Currency and commodity markets moved unevenly this week as investors weighed economic data and policy signals. The euro slipped below $1.16 ahead of delayed U.S. inflation and European PMI figures, while the dollar stayed firm on renewed optimism over U.S.-China trade talks.

Softer U.K. inflation figures increased bets on a Bank of England rate cut, and the yen hovered near 151.9 per dollar after new Prime Minister Sanae Takaichi unveiled plans for a stimulus package larger than last year’s ¥13.9 trillion.

Gold fell below $4,090 per ounce after its steepest drop in a decade as profit-taking and stronger risk appetite weighed on demand. Despite the recent pullback, gold remains up 60% year-to-date, supported by expectations of further Federal Reserve stimulus and ongoing geopolitical risks.

Euro Slips Below $1.16 as Dollar Strengthens

The euro slipped just below $1.16 as investors focused on the upcoming release of U.S. inflation data and European PMI figures due Friday, key inputs that could shape the next moves in monetary policy. The dollar held firm, drawing strength from renewed optimism over U.S.-China trade discussions, following President Trump’s upbeat remarks about striking a “good deal” with President Xi Jinping.

In the U.K., softer inflation data fueled talk that the Bank of England may move toward rate cuts, while expectations for a 25-basis-point Federal Reserve cut in October remain firmly in place.

From a technical view, the euro faces resistance near 1.1650, with strong support around 1.1575.

Takaichi’s Fiscal Push Pressures Yen

The Japanese yen hovered near 151.9 per dollar on Thursday after a sharp drop in the previous session, following reports that Prime Minister Sanae Takaichi plans a stimulus package larger than last year’s ¥13.9 trillion plan. Her administration is expected to pursue expansive fiscal measures, including higher government spending and possible cuts to the consumption tax.

Meanwhile, the Bank of Japan is likely to hold off on additional rate hikes, with most analysts projecting the next increase early next year.

Technically, resistance stands near 152.80, while support is firm at 150.30.

Gold Extends Losses as Risk Appetite Rises

Gold prices continued to slide on Thursday, falling more than 0.20% to below $4,090 per ounce as investors locked in profits after recent strong gains. The decline followed Tuesday’s sharp 5% drop. Confidence in risk assets improved as hopes grew for progress in U.S.–China trade discussions, with Presidents Trump and Xi scheduled to meet next week to discuss easing tariffs.

Despite the pullback, gold remains up 60% year-to-date, supported by expectations of additional Federal Reserve stimulus and lingering geopolitical challenges, including the postponement of the Trump-Putin meeting after Moscow’s rejection of a Ukraine ceasefire.

From a technical view, key support lies near $4,065, while resistance is seen around $4,150.

Pound Declines on Weak Inflation Data

The British pound slipped toward $1.3350 after softer-than-expected inflation figures reinforced expectations of an early Bank of England rate cut. Headline inflation held at 3.8% in September, missing projections for a rise to 4%, while core inflation eased to 3.5% from 3.6%, below forecasts of 3.7%.

The weaker readings brought some relief to Chancellor Rachel Reeves, who has hinted that her November 26 budget will include new measures to ease living costs.

From a technical view, support stands near 1.3300, with resistance around 1.3425.

Silver Slides as Focus Shifts to Risk Assets

Silver traded near $48.30, down 0.25% for the day, extending losses after a sharp 7% decline in the previous session. The metal came under renewed selling pressure as investors turned toward higher-risk assets on optimism surrounding U.S.-China trade negotiations. Market sentiment brightened after President Donald Trump said on Monday that a “really fair and really great” trade agreement could be reached at next week’s APEC Summit in South Korea.

From a technical view, resistance stands near $49.25, while support is located around $47.50.