Insights 
VT 
Gold and Rate Cuts
Gold has attracted sellers due to the Israel-Hamas peace deal impacting safe-haven assets. Bets on a US Federal Reserve rate cut and a US government shutdown have limited the US Dollar movement, offering support to gold. Traders are looking to Fed Chair Jerome Powell’s speech for insights on rate cuts.
Gold has rebounded towards the $4,000 level, recouping most Asian session losses. The expectation of further Fed rate cuts supports gold prices, with concerns over a prolonged US government shutdown contributing to this momentum. Despite geopolitical tensions easing with the Israel-Hamas agreement, gold’s path appears upward.
The possibility of rate cuts in October and December is at 93% and 79%, respectively. The US government shutdown continues, suppressing the US Dollar and aiding gold. Tensions with Russia over potential US missile supplies to Ukraine add to geopolitical risks, aiding gold’s stability.
Technical Analysis
Technically, gold has shown resilience near the $4,000 mark, indicating an upward trajectory if it breaks above $4,035-4,036. A sustained move beyond $4,100 could fuel further gains. Conversely, a drop below $4,000 might see gold testing lower support levels around $3,948-$3,947, with a further decline possible.
Given the current situation on October 9, 2025, we are seeing gold hold strong above the critical $4,000 mark. The recent dip was quickly bought up, which tells us the underlying bullish sentiment is still very much in play. The main driver is the widespread expectation of more interest rate cuts from the Federal Reserve this year.
We should frame this in the context of the Fed’s major policy pivot that began back in late 2023 and continued through 2024. After seeing Core PCE inflation fall to 2.6% by the end of 2024, the path was set for the loosening cycle we are in now. The CME FedWatch Tool now showing a 93% chance of a cut this month makes it clear that the market is positioned for cheaper money, which is supportive for gold.
US Government Shutdown Impact
The ongoing US government shutdown, now in its ninth day, is adding fuel to the fire by weakening the US Dollar. We remember the 35-day shutdown back in 2018-2019 and the market uncertainty it caused, which often benefits safe-haven assets. This political deadlock is providing a steady tailwind for gold prices and capping any significant strength in the dollar.
While the Israel-Hamas peace agreement is causing some short-term profit-taking, the broader geopolitical risks have not vanished. Tensions involving Russia are a reminder of the same conflicts that helped underpin gold’s historic rally through 2024. This backdrop should limit any significant downside for the precious metal in the coming weeks.
For derivative traders, this suggests a strategy of buying call options with strike prices above the recent all-time high of around $4,060. This allows participation in the expected upward trend while capping risk. More conservative traders might consider selling cash-secured puts or bull put spreads with a strike price below the strong psychological support at $4,000 to collect premium.
With Fed Chair Jerome Powell’s speech on the horizon, a spike in volatility is almost certain. Traders could position for this by using straddles, buying both a call and a put option with the same strike price and expiry date. This strategy would profit from a large price move in either direction following his remarks.
