Gold Prices Fall 2% from Record High as Trump Eases Threats to China.
Gold price (XAU/USD) dropped 2% after hitting a record high of $4,379 earlier on Friday. Prices fell below $4,250 following US President Donald Trump’s comment that high tariffs on China are not sustainable. As of now, gold prices are around $4,230 to $4,240.
Bullion Retreats Below $4,250 as Risk Appetite Returns and Yields Climb
The Greenback is gaining strength, which is weighing down Gold prices. The most notable change is in US Treasury yields, with the 10-year T-note yield rising by nearly three basis points. US President Donald Trump mentioned that keeping high tariffs on China is not practical and could heighten tensions between the two nations.
Trump also said he expects to meet Chinese President Xi Jinping in a couple of weeks in South Korea. This statement improved risk appetite and caused precious metals prices to drop.
Federal Reserve officials made comments recently. St. Louis Fed official Alberto Musalem supports a rate cut at the October meeting while stressing the need to control inflation at the 2% target. Fed Governor Christopher Waller agreed with Musalem, while Minneapolis Fed leader Neel Kashkari said the economy isn’t slowing as much as we believe.
Next week, the US economic calendar is light, but many market participants are eagerly waiting for the release of the Consumer Price Index (CPI) figures on Friday at 8:30 AM ET.
Technical Outlook: Gold Stays Bullish Despite Testing $4,200
Gold price uptrend remains intact. The ongoing pullback opened the door for buyers, so step in at around the $4,200 milestone, and a daily close above $4,250 could prompt traders to drive prices even higher.
Key resistance levels lie at $4,300, $4,350, and the all-time high of $4,389. Conversely, the first support would be the $4,200 mark, followed by the October 17 daily low of $4,185.
US Dollar Index (DXY) Trims Some Losses After Bouncing From the 98.00 Area.
The US Dollar Index is finding some support around the 98.00 mark and is reducing some losses during Friday’s trading in Europe. However, the Index is still at risk after dropping almost 1.30% in a four-day decline.
The USD Index measures the value of the US dollar against six major currencies. It has struggled to move away from weekly lows due to worries about rising tensions between the US and China, as well as expectations of future interest rate cuts by the Federal Reserve, which are hindering any chances of recovery.
Trade Wars, Fed Easing Hopes Weigh on the USD.
The trade rift with China escalated on Thursday after US President Donald Trump affirmed that they are already in a trade war with the Asian Country. Later on the day, Treasury Secretary Scott Bessent called China’s trade negotiator “unhinged” wolf, which did not help to de-escalate tensions.
Furthermore, the Fed keeps sending signals of further monetary easing ahead. On Thursday, Fed Governor Christopher Waller affirmed that the bank should cut rates again in October, the impact of tariffs on inflation remains moderate, while Stephen Miran, Trump’s latest appointment to the board, reiterated the need for more aggressive rate cuts.
The Fed is the primary source of data amid the US government shutdown, and it will release September’s Industrial Production report, which is expected to have grown at a steady 0.1% pace. Later on, St. Louis Fed President Alberto Mussalen might provide further clues on the bank’s monetary policy plans.
Bitcoin’s Bullish October Is Headed to Be Its Worst in 10 Years
Crypto traders often call October “Uptober” because the month usually brings substantial gains for bitcoin. However, this year is on track to be the worst October since 2015. Bitcoin has dropped 5% so far and is trading near $107,000, according to CoinGlass. Typically, bitcoin gains an average of 19.8% in October, while November sees even more substantial gains.
Last week, bitcoin’s price fell below $107,000, leading to $1.2 billion in liquidations, wiping out long positions from September’s rebound. Ethereum, Solana, and BNB have decreased by 4% to 7%, while smaller coins like DOGE ($0.1968) and ADA ($0.6517) have lost over 20%. The CoinDesk 20 Index is down 8% this month.
October’s decline is rare. Bitcoin has only closed lower twice this month over the past twelve years—2014 and 2018. In 2020, bitcoin recovered from a loss and gained 27% by month-end, setting the stage for record highs the following year. With two weeks left in October, there’s still a chance for a rally.
This year, “Uptober” is under pressure to live up to its name.
Can Bitcoin Reverse Course?
If Bitcoin can reclaim and close decisively above $107,250, it could set up a powerful bullish reversal. Such a move would form a hammer-like candle on the daily chart — a pattern that often signals exhaustion in selling pressure and potential for a trend change. What makes this setup even more compelling is its proximity to the 200-day moving average, a widely watched gauge of long-term trend momentum.
Can Ethereum Price Reclaim $4,500 in October?
Ethereum’s MVRV Extreme Deviation Pricing Bands show that its recent pullback has been stabilizing near the mean band around $3,900, a level that has historically served as a springboard for new rallies.
Each time ETH has bounced off this midpoint, including in early 2021, mid-2023, and early 2024, it has advanced toward the +1σ (standard deviation) band, currently hovering near $5,000.
Key Asia Crypto Backers Set to Launch $1 Billion Ethereum Treasury.
Several crypto leaders in Asia have begun plans to enter the Ethereum treasury race, with Li Lin, founder of crypto exchange Huobi and chairman of investment firm Avenir Capital, joining forces with a group of investors in an effort to launch a $1 billion ETH treasury.
Ethereum Price Forecast: ETH Tests $3,800 Support
Ethereum faced $215.9 million in future contract liquidations, with $146.1 million coming from long positions. ETH briefly dropped below the critical support level of $3,815, but buyers quickly pushed it back up. However, the top altcoin still struggles against a descending trendline resistance above this level.
If ETH cannot maintain the $3,800 support, it may fall toward the support just below $3,500. The Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) both show values below neutral, indicating strong bearish momentum.
Conclusion
This week’s markets reflected a cautious return of risk appetite, with gold retreating from record highs and the dollar finding mild support. Meanwhile, traders are watching upcoming inflation data for clues on the Fed’s next move. In crypto, Bitcoin’s uncharacteristic “Uptober” slump and Ethereum’s struggle near key support levels highlight the fragile sentiment across digital assets.
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As global monetary policy and geopolitical developments continue to shape investor mood, volatility is likely to remain elevated in both traditional and crypto markets heading into late October.
