Insights 
VT 
Gold is currently range-bound between $3,900-$4,050 due to a cautious Federal Reserve stance and a stronger US Dollar. The Fed’s decision to maintain current interest rates has bolstered the USD, limiting gold’s upside. The ISM Manufacturing PMI fell to 48.7 in October, marking eight months of contraction, further influencing market sentiment.
China’s decision to reduce the VAT exemption on gold purchases from 13% to 6% affected sentiment in the world’s largest bullion market. In trade developments, a new framework deal between the US and China offers mutual concessions, possibly alleviating some trade tensions. The US government shutdown continues, entering its thirty-third day without resolution, delaying vital economic data releases.
Gold’s Technical Overview
Gold’s price remains steady near $4,000, held by technical resistance at key Simple Moving Averages. The RSI indicates a neutral bias, reflecting market indecision. Gold serves as a safe-haven asset during volatile times, with central banks, especially in emerging markets, increasing their reserves. The metal is inversely correlated with the US Dollar and Treasuries, often reacting to geopolitical instability and interest rate changes. A strong USD generally restrains gold prices, while a weaker dollar could act in favour of gold.
As of November 3, 2025, we are seeing gold caught in a tight range between $3,900 and $4,050. The main pressure comes from a stronger US Dollar after the Federal Reserve signaled it is unlikely to cut interest rates again this year. This makes holding a non-yielding asset like gold less attractive for now.
The Fed’s hawkish pause last week has significantly shifted market expectations. Looking at the CME FedWatch Tool, the probability of another rate cut at the December 2025 meeting has fallen from over 60% to just under 30%. Derivative traders should be cautious about buying far out-of-the-money call options until this sentiment changes.
However, there are clear signs of economic weakness that could support gold prices in the medium term. The US ISM Manufacturing PMI has now been in contraction for eight consecutive months, a worrying trend we last saw persist for over a year back in 2023-2024. The ongoing 33-day government shutdown, nearing the 35-day record from late 2018, is also stoking fears of a sharper economic slowdown.
Chinese Influence and Volatility Trends
While the new Chinese tax rule on gold purchases is a headwind for retail sentiment, we see institutional demand remaining robust. The People’s Bank of China continued its steady acquisition, adding another 23 tonnes in the third quarter of 2025, according to recent World Gold Council data. This underlying central bank buying should provide a solid floor for prices.
The current price consolidation has pushed the Gold Volatility Index (GVZ) down near 12, its lowest level in months. This low-volatility environment is ideal for traders looking to sell premium through options strategies like strangles, positioning to profit if gold remains within its current $3,900-$4,050 channel. Traders should watch these key levels closely, as a breakout in either direction will likely be powerful.
