Gold Surges 8.6% This Week to Hit $4,300 – Safe-Haven Demand Soars
Gold really took off on Friday, breaking through the $4,300 an ounce barrier and posting its highest weekly gain of the 2025...
Quick overview
- Gold surged to over $4,300 an ounce, marking its highest weekly gain of 2025 at 8.6%.
- Investor concerns over U.S. regional banks and global trade tensions are driving demand for gold as a safe-haven asset.
- Markets anticipate a 25-bp rate cut by the Federal Reserve, further boosting gold's appeal amid falling interest rates.
- Technical indicators suggest a potential pullback for gold, but bullish momentum remains strong if it holds above $4,280.
Gold really took off on Friday, breaking through the $4,300 an ounce barrier and posting its highest weekly gain of the 2025 year in the process. The precious metal shot up by 8.6% this week, thanks to growing concerns over the stability of U.S. regional banks, intensifying global trade tensions and an increasing expectation of a Federal Reserve rate cut later this month.
Markets are now pricing in a near-certainty of a 25-bp rate cut at the Fed’s October 29-30 meeting, a 96.7% probability according to CME’s FedWatch data. And with another cut expected in December to prop up the economy, policymakers are looking to support growth in the face of weak labour market numbers.
Gold, as you’d expect, tends to do well when interest rates are falling since it’s a non-yielding asset. Lower yields make gold a more attractive holding for investors who want to protect themselves from economic uncertainty – & that’s exactly what’s driving up demand – & the result is that gold has surged by more than 66% year to date.
Risk Aversion Fuels the Rally
It looks like investors are getting nervous about the stability of the financial markets – and as a result, they’re turning to gold as a safe-haven asset. Persistant weakness in US regional banks & renewed US-China trade tensions have made traders more cautious & pushed them towards tangible assets.
- ETF inflows have remained strong – & this is a sign that institutions are piling into gold.
- Central banks just keep on buying – & they’re diversifying out of the US dollar.
- Geopolitical risks are on the rise – & this is boosting demand for safe-haven assets like gold.
Thursday’s Wall Street sell-off just highlighted how nervous investors are – & how much they’d rather stick with stability than take on risk.
Gold (XAU/USD) Technical Outlook & Trade Setup
Technically, gold is still trading inside an upward channel & is sitting at $4,362. The metal is continuing to make new highs & new lows, which is just further confirmation that the trend remains bullish. The 20-EMA ($4,235) is still above the 50-EMA ($4,122), which reinforces the short-term upside momentum.
However, the RSI is now in overbought territory, which suggests that a pullback may be on the cards – possibly down to $4,280-$4,260. And given that we’ve had some sort of buyer hesitation recently, indicated by recent candlestick formations, this could be the first sign that the rally is starting to wind down.
But if gold can hold above $4,280 then the next targets are $4,382, $4,492, & $4,587 – which are all key Fibonacci levels. On the other hand, if it breaks below $4,235, then we could see a temporary correction down to $4,179 before the trend resumes.
Trade Idea:
If you’re a trader, you might want to consider buying on dips around $4,260-$4,280, with the aim of hitting $4,490-$4,580. Use a stop loss below $4,220. The momentum remains bullish – & with gold still heading up towards record highs, even a brief bit of consolidation could give you a fresh entry point.
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