Gold Prices Rebound Amid Mixed Market Sentiment

Gold prices staged a rebound after a four-day losing streak, driven primarily by technical buying prompted by last week’s record-breaking highs. Despite the recovery, gains remained relatively subdued as investor sentiment continues to grapple with market uncertainty and macroeconomic factors.

As of October 30 at 5:59 a.m. Korea Standard Time, gold futures on the New York Mercantile Exchange (COMEX) closed at $4,000.7 per ounce, marking a $17.6 increase or 0.44% from the prior session. During intraday trading, prices briefly surged beyond $4,040 before retracing to the $3,940 range, highlighting ongoing volatility. Meanwhile, gold spot prices in the Singapore market rose by 0.5%, settling at $3,950.42 per ounce.

Technical Drivers Behind the Recent Rebound

The modest recovery in gold pricing is largely attributed to technical corrections following the steep declines observed over the past week. Gold prices had reached an unprecedented peak above $4,380 per ounce, driven by feverish speculative buying. However, this rally led to overheated levels that triggered profit-taking, causing a sharp pullback over four trading sessions.

Bloomberg data reveals a concerning continuation of net outflows from gold exchange-traded funds (ETFs), marking the longest streak of withdrawals since May. These trends underscore weakening investor interest, which has impeded sustained upward momentum for the precious metal.

Macro Headwinds Limit Gold’s Upside

Several macroeconomic factors continue to weigh on gold prices. The fading speculative buying pressure that had propelled recent surges coincides with diminishing prospects for a Federal Reserve rate cut in December. Gold, a non-interest-bearing asset, typically struggles when rates increase and the U.S. dollar strengthens.

Federal Reserve Chair Jerome Powell recently reinforced this sentiment, stating overnight that a rate cut in December is "not a certainty" amid persistent economic uncertainties. This outlook dampened investor optimism over potential monetary easing, further pressuring gold prices.

Additionally, easing geopolitical risks—including improved prospects for U.S.-China trade negotiations—have reduced demand for safe-haven assets like gold. Both nations are approaching a pivotal summit in South Korea, fueling cautious optimism over the de-escalation of trade tensions. Correspondingly, the geopolitical premium that bolstered gold’s value earlier this year has begun to recede, prompting increased investor caution.

Robust Long-Term Bullish Momentum

Despite recent fluctuations, gold prices continue to reflect exceptional long-term strength, having surged nearly 50% year-to-date. Structural drivers, including heightened global central bank purchases, fears of currency devaluation, and a growing appetite for "debasement trades" amid fiscal instability, provide critical support for gold’s bullish trend.

Sebastian Mullins, Schroders’ Head of Multi-Asset and Fixed Income, described the ongoing correction as “a natural development following excessive gains.” Nonetheless, he emphasized the unprecedented nature of gold’s current structural upward trajectory when compared to previous cycles. Mullins’ remarks highlight the enduring appeal of gold as a hedge against financial and economic uncertainties.

Upcoming Market Catalysts

Investors are now turning their attention to the World Gold Council’s (WGC) quarterly demand report, which is anticipated to offer deeper insights into global demand trends, particularly in relation to institutional and central bank activity. This data could provide valuable guidance on future price movements and potentially signal shifts in investor sentiment.

In the near term, gold’s trajectory is likely to be influenced by a combination of macroeconomic developments, technical adjustments, and evolving market psychology. However, the precious metal’s broader upward trend remains intact, underscoring its status as a vital safeguard against global financial instability. As uncertainties persist, gold’s allure as a tangible store of value is expected to remain a cornerstone for both individual and institutional investors.