Gold Rebounds Before Fed Decision (10.29.2025)

The yen strengthened beyond 152 per dollar for a second session ahead of the BOJ’s policy decision, with policymakers debating the timeline for rate hikes with easing trade risks and sticky inflation.

The euro traded steady near $1.16 as markets entered a high-stakes week featuring global trade talks, central bank meetings, and key Eurozone data. The ECB is expected to hold rates, while the Fed is set to cut, highlighting diverging policy paths.

Gold rebounded to $3,970 per ounce, supported by expectations of a Fed rate cut and progress in U.S.-China trade negotiations. The metal remains up nearly 50% year-to-date, underpinned by central bank demand and inflation concerns.

Euro Steady Before Key Trade Talks

The euro held steady around $1.16, showing little change from last week as markets entered a crucial period filled with trade negotiations, central bank meetings, and key European data releases. Sentiment improved following progress in U.S.-China trade talks, with focus shifting to Thursday’s Trump-Xi summit, where both leaders are expected to finalize a preliminary trade framework agreed upon over the weekend.

On the policy front, the European Central Bank is expected to keep rates unchanged, while the Federal Reserve is anticipated to cut rates in response to soft labor data and muted inflation. Later this week, attention will turn to Eurozone GDP and October inflation figures for further signals on the region’s economic trajectory.

From a technical view, the euro faces resistance near 1.1680, with strong support around 1.1620.

Yen Strengthens with Policy Debates

The yen strengthened past 152 per dollar on Wednesday, marking a second day of gains ahead of the Bank of Japan’s policy decision later this week. While the BOJ is expected to leave rates unchanged, policymakers are set to debate the timing of future hikes amid easing tariff risks and persistent inflation pressures.

The currency rose 0.5% on Tuesday after U.S. Treasury Secretary Scott Bessent met with Finance Minister Satsuki Katayama to discuss yen volatility, stressing the need for prudent policy, a comment seen as a mild critique of Japan’s cautious stance. The Economic Revitalization Minister reiterated that authorities are monitoring currency moves, noting that yen weakness continues to benefit exporters. Separately, President Trump met Prime Minister Sanae Takaichi, pledging to strengthen U.S.-Japan relations and signing new agreements on trade and critical minerals cooperation.

Technically, resistance stands near 152.80, while support is firm at 151.50.

Gold Rebounds Before Fed Rate Decision 

Gold rose to around $3,970 per ounce on Wednesday, snapping its recent decline as attention turned to the Federal Reserve’s expected rate cut later in the day. Markets are awaiting Fed Chair Jerome Powell’s comments for signals on policy direction, with another cut already priced in for December.

Progress in U.S.-China trade talks are being observed with Presidents Trump and Xi reportedly close to finalizing a framework agreement aimed at halting new U.S. tariffs and easing China’s rare earth export curbs.

Despite recent volatility, gold remains on track for a third consecutive monthly gain, up nearly 50% this year, supported by geopolitical tensions, central bank buying, and concerns over currency devaluation.

Technically, support is seen near $3,880, while resistance stands around $4,020.

Pound Slides to Three-Month Low

The British pound fell to around $1.325, its lowest level since late July, as markets ramped up expectations of Bank of England rate cuts. The decline followed reports that the Office for Budget Responsibility (OBR) plans to lower the UK’s productivity growth forecast by 0.3 percentage points, a revision that could create a £20 billion shortfall in public finances.

The downgrade adds pressure on Chancellor Rachel Reeves ahead of next month’s budget announcement, where she is expected to tackle a fiscal gap of up to £35 billion. At the same time, softer inflation data reinforced the case for monetary easing, with the BRC survey showing further declines in food price inflation after last week’s weak CPI print. With price pressures continuing to cool, money markets now assign a 68% probability of a 25 basis point rate cut by the Bank of England in December.

From a technical view, support stands near 1.3230, with resistance around 1.3320.

Silver Extends Losses with Fed Outlook

Silver fell below $47 per ounce, extending last week’s decline as optimism over U.S.–China trade negotiations curbed demand for safe-haven assets. Attention now turns to Thursday’s Trump–Xi meeting, following productive weekend talks that yielded agreement on several key issues. U.S. Treasury Secretary Scott Bessent confirmed that Trump’s proposed 100% tariff is now off the table, while China agreed to pause for one year its planned expansion of rare earth export controls.

Meanwhile, expectations are rising for a Federal Reserve rate cut this week after softer inflation data on Friday. Last week, silver dropped over 6%, weighed by profit-taking and renewed concerns of overvaluation following its sharp rally to record highs.

From a technical view, resistance stands near $47.90, while support is located around $45.50.