Insights 
VT 
Gold Price Influences
Gold is a preferred asset for its historic role as a store of value and medium of exchange. Apart from being used in jewellery, it acts as a safe-haven investment during unstable times and a hedge against inflation. Central banks are the largest purchasers, with 1,136 tonnes added to reserves in 2022 alone. Their goal is to bolster their economies and currencies, with significant increases seen in countries like China, India, and Turkey.
We are seeing a minor dip in gold prices today, October 27, 2025, largely due to a resilient US Dollar. The Federal Reserve’s persistent “higher for longer” interest rate stance, which we’ve seen throughout 2025, continues to make the dollar more attractive than non-yielding assets like gold. This short-term pressure could present opportunities for traders who believe the fundamental story for gold remains strong.
Beneath the surface of daily price moves, there are conflicting economic signals that create uncertainty. While interest rates are high, persistent global inflation, which has remained stubbornly above the 3% mark in many developed economies, supports gold’s role as an inflation hedge. Downward revisions to global growth forecasts for 2026 are also stoking recessionary fears, which typically benefits safe-haven assets.
Market Volatility and Strategies
It is critical to note the floor of support being built by central banks, who have continued their aggressive purchasing. Building on the record-breaking acquisitions we saw back in 2022 and 2023, central banks have reportedly added over 250 tonnes in the third quarter of 2025 alone. This consistent demand suggests that significant price dips are likely to be viewed as buying opportunities by major institutions.
Given this backdrop, we see elevated volatility as the main theme for the coming weeks. The CBOE Volatility Index (VIX) has been hovering around 22, well above its historical average, reflecting nervousness in the equity markets. For derivative traders, this environment is well-suited for strategies like purchasing call options to position for a potential spike on geopolitical news, or using collar strategies to protect against downside from hawkish Fed commentary.
The inverse correlation between gold and the US Dollar will remain the most important factor to watch. Any data suggesting a weakening US economy, or any hint from officials at the upcoming November FOMC meeting that rate cuts are being considered for mid-2026, could trigger a sharp dollar sell-off. Such a move would likely provide a powerful tailwind for gold prices heading into the end of the year.
