Despite the Federal Reserve’s widely anticipated rate cut last week, Chair Jerome Powell hinted that it might be the last one this year, citing a lack of economic data because of the prolonged government shutdown in the United States. Before Powell’s remarks, market pricing indicated a probability of a December cut of over 90%; now, it shows a probability of roughly 63%. Treasury Secretary Scott Bessent reiterated his demand for the Fed to speed up rate cuts on Sunday, saying that high interest rates may have already put parts of the U.S. economy, especially housing, into a recession.

Last week, US President Donald Trump and Chinese President Xi Jinping reached an agreement to prevent their trade battle from getting worse. Trump agreed to reduce his tariff from 57% to 47% in return for China lifting restrictions on its rare earth exports and boosting its purchases of American soy beans. The price of gold may decline if the US-China trade agreement has positive effects on the market for safe-haven assets. Gold’s recent strong drop has not affected its long-term favourable fundamental drivers. A long-standing tax incentive on gold sales was eliminated by China, which eliminated the 6% VAT incentive. This move may result in higher consumer prices and less demand in one of the biggest bullion markets in the world.

In its Gold Demand Trends report, WGC stated that investors continued to hold a commanding lead in Q3. Demand increased overall because of massive ETF purchases (+222t) and a fourth consecutive quarter of bar and coin demand exceeding 300t (316t). Even though the y-t-d purchase of 634t has been slower than the 724t bought in the first three quarters of last year, central bank buying remained high at 220t, 28% higher than the previous quarter. As volumes continued to be pressured by the record price environment, jewellery consumption in Q3 saw a double-digit year-over-year fall (the sixth consecutive) to 371t. A 13% year-over-year gain in value to US$41 billion contrasts with this.

The dollar index is lingering at three-month highs and trading near the 100 mark as investors consider trade developments and await important economic data. After Congress failed to enact funding legislation for 2026, the most recent federal government shutdown started on October 1, 2025, and it is still going on as of November 2, 2025. 900,000 workers have been placed on furlough, and around 2 million workers have had their pay suspended. The lengthy US government shutdown, meanwhile, was delaying the delivery of important economic indicators, such as the monthly jobs data. This week, however, investors will gain information from private measures, including Michigan mood, ISM PMIs, and ADP employment.

Gold prices have been consolidating in the range of $3920 (~Rs 119,000) and $4060 (~Rs 122,000) for the past few days. Until this consolidation continues, buy on the dips and sell on rallies. But if prices break out on either side and sustain, there could be a 3-4% sharp move. 

Silver prices have been consolidating in the range of $46(~Rs 140,000) to $49(~Rs 150,000) for the past few days. Until this consolidation continues, buy on the dips and sell on rallies. But if prices break out on either side and sustain, there could be a 4-5% sharp move.