Gold retreats after record high as profit-taking..

7 October 2025

Gold Retreats After Record High as Profit-taking Sets In, But Outlook Remains Bullish

Market comments on behalf of Eric Chia, Financial Markets Strategist at Exness

Gold retreated on Tuesday after briefly touching another record high, as investors locked in profits following the metal’s extended rally. The move came against a backdrop of persistent safe-haven demand driven by the US government shutdown, expectations of further Federal Reserve rate cuts, and heightened political uncertainty in Europe and Asia.

The shutdown entered a second week with no resolution in sight, delaying critical economic data and clouding the Fed’s policy outlook. Markets expect interest rates to be cut this month and in December, despite Kansas City Fed President Jeff Schmid urging caution on further easing, given lingering inflation risks.

Political turbulence abroad added further support to bullion. In France, ongoing instability following the resignation of Prime Minister Sebastien Lecornu deepened concerns over fiscal governance. In Japan, the appointment of a new prime minister is expected to bring a more dovish stance to monetary policy, reinforcing global low-yield dynamics.

On the demand side, the People’s Bank of China extended its gold-buying streak into an eleventh month in September, underscoring sustained central bank appetite for the bullion.

Meanwhile, geopolitical risks continue to underpin sentiment. While peace talks in the Middle East resumed, tensions continued to persist. In Eastern Europe, tensions showed no signs of easing.

 

Zaid Barem / ymm