Gold prices are on track for a second consecutive weekly decline, pressured by cautious Federal Reserve signals and renewed optimism over U.S.–China trade relations.
Market Overview
Gold (XAU/USD) fell to a three-week low, trading around $4,116 per ounce as of Friday, 31 October 2025. The decline marks the metal’s second straight weekly loss, driven by a shift in investor sentiment away from safe-haven assets CNBC FXStreet.
Fed Signals and Rate Outlook
Investor caution ahead of the Federal Open Market Committee (FOMC) meeting has dampened gold’s momentum. While some market participants anticipate further rate cuts, recent comments from Fed officials have been more hawkish than expected, reducing the likelihood of near-term easing FXStreet The Financial Express.
Higher interest rates typically weigh on gold by increasing the opportunity cost of holding non-yielding assets. Traders are now closely watching upcoming U.S. inflation data for clues on the Fed’s next move The Financial Express.
Trade Optimism Weakens Safe-Haven Demand
Signs of progress in U.S.–China trade negotiations have also contributed to gold’s decline. The two countries reportedly agreed to pause most tariffs for 90 days, boosting risk appetite and reducing demand for gold as a hedge against geopolitical uncertainty CNBC Economies.com.
Technical Trends
Gold prices are down 3.95% this week, marking the third weekly loss in a month and the steepest decline in 2025 so far Economies.com. Despite the pullback, analysts at Morgan Stanley and JPMorgan maintain bullish long-term forecasts, citing persistent inflation and central bank buying as supportive factors KITCO The Financial Express.
Gold-bullion-credit-Aselya
Sources:
CNBC CNBC – Gold hits three-week low
FXStreet FXStreet – Gold dips on trade optimism
KITCO Kitco – Morgan Stanley outlook
The Financial Express Financial Express – JPMorgan forecast
Economies.com Economies.com – Worst weekly performance
