Softer Fed Tone and Supply Strains Lift Metals (10.16.2025)

The euro climbed above $1.16 on Thursday as easing French political tensions and a weaker U.S. dollar lifted sentiment. 

The yen strengthened for a third day amid political uncertainty in Japan and safe-haven demand, while gold surged to a record $4,230 on dovish Fed comments and renewed U.S.–China friction. Sterling regained ground above 1.34 following softer signals from both the Fed and BoE, and silver traded near all-time highs above $53, driven by tight global supply and strong industrial demand.

Euro Rebounds Above $1.16 on Softer U.S. Dollar

The euro climbed above $1.16 on Thursday, rebounding from a two-month low as easing French political tensions and rising U.S. rate-cut expectations lifted sentiment. French PM Lecornu proposed delaying pension reforms to 2027 to gain Socialist backing and avoid a no-confidence vote. Meanwhile, Fed Chair Powell’s comments on a softening labor market strengthened bets on further cuts, while new U.S.–China tariff and port fee tensions added pressure.

Technically, 1.1620 is the key support, while resistance is seen at 1.1700.

Yen Climbs for Third Day as Dollar Weakens

The yen climbed past 151 per dollar on Thursday, marking a third straight gain amid political uncertainty after the LDP’s split with Komeito. Traders covered short positions amid doubts over Sanae Takaichi’s policies, while BoJ’s Naoki Tamura cautioned against tightening too soon. Safe-haven demand, a weaker dollar, ongoing U.S.–China tensions, the prolonged U.S. shutdown, and dovish Fed signals also supported the yen.

Resistance is at 151.60, while support holds at 150.40.

Gold Hits Record $4,230 on Dovish Fed Signals

Gold surged past $4,230 per ounce on Thursday, setting a new record as safe-haven demand strengthened on expectations of a dovish Fed. Chair Powell’s remarks on labor market weakness fueled bets on 25 bps rate cuts in both October and December, weakening the dollar and lifting gold. Rising U.S.–China tensions over rare earth export restrictions further increased demand for safe-haven assets.

From a technical perspective, support is around 4190, and resistance is at 4270.

Sterling Gains After Fed, BoE Tone Turns Softer

GBP/USD rebounded above 1.3400 on Thursday after dovish remarks from Fed Chair Powell and BoE Governor Bailey. Powell hinted the Fed may soon pause balance sheet reduction to preserve liquidity and noted labor market weakness, with ADP data showing a 36,000-job loss in September. In the UK, unemployment rose to 4.8%, payrolls fell by 10,000, and jobless claims rose by 25,000, signaling stagflation risks. Bailey called the figures disappointing but signaled no immediate BoE rate cuts.

From a technical perspective, support is around 1.3360, and resistance is at 1.3460.

Silver Holds Near All-Time High Amid Supply Deficit

Silver climbed above $53 per ounce on Thursday, near record highs as a global supply shortage fueled the rally. The metal has surged 37% in just 44 days since Fed Chair Powell’s Jackson Hole speech. Having surpassed its 2011 peak of $49.81, silver remains supported by strong industrial demand in solar panels, EVs, and electronics, alongside speculative buying. Tight supply continues to heighten volatility not seen since the 1980s silver boom.

From a technical perspective, resistance is observed at 53.50, while support is located at 52.30.