The recent gold price slipped, possibly due to several factors:
- Israel-Hamas Ceasefire
The first phase of the ceasefire between Israel and Hamas has been achieved, with the diplomatic efforts of Qatar, the US, Egypt, and Turkey as the key mediators to assist in this breakthrough. This phase will focus on hostage and prisoner exchanges, possibly on Saturday, and that will also ease some tension in geopolitics. As a result, the gold price dropped earlier this morning.
However, consider one thing: despite this first-phase breakthrough, it does not mean that the war will finally end; this event only represents the first phase of a multi-stage peace plan.
→ So if the ceasefire breaks once again midway, then this also means that the potential of gold rising will also be high.
- The Federal Reserve Meeting
Despite having a rate cut in September 18-19, 2025, the Federal Reserve Meeting minutes reported that several FED members are still cautious and skeptical over the inflation problem, albeit they are seeing softer labor market conditions in the near term.
A rising inflation problem has kept the FED members in check for further easing decisions, which could also be another barrier to the gold price upward. This is also another factor contributing to the downward gold. Regardless, the market is still priced in for two more rate cuts this year, each a 25 bps cut in October and December.
- Profit-Taking
Another factor that could put downward pressure on the gold price is the market taking a profit after reaching a record high.
In conclusion, these three reasons, such as the Israel-Hamas ceasefire, the Inflation problem, and profit taking, are keeping the gold price down. However, do not forget about the US shutdown, which has put the US economy in a bad spot. As long as the US shutdown continues, the chance of having an upward gold price still exists, and the employment report could potentially be delayed again. However, if not—meaning the US agreed to reopen—then the gold price will continue to go downward.
