November 3, 2025 | Global Markets Desk
Gold prices dipped below $4,000 per ounce on Monday, marking their second straight day of losses, after China scrapped tax rebates for gold purchases — a move analysts say could sharply cool retail demand in the world’s largest consumer market for the precious metal.
The benchmark spot gold was last seen trading around $3,975/oz, down 1.3% intraday, while U.S. gold futures slipped to $3,982/oz on the COMEX exchange. Despite the correction, 2025 remains a landmark year for bullion, which has already logged 50 record highs, driven by inflation worries, geopolitical tensions, and central bank buying.
🇨🇳 China’s Policy Shift Hits Demand
The sudden announcement by Beijing’s Ministry of Finance to end the tax rebate on gold purchases took markets by surprise. The incentive had been introduced in early 2024 to encourage consumer spending and stabilize precious metal trade amid global uncertainty.
Removing the rebate means higher domestic gold prices for Chinese buyers — a development likely to dampen jewelry sales and speculative investment demand.
“This policy reversal effectively tightens liquidity in the Chinese retail gold market,” said Mei Lin, senior metals strategist at ICBC International.
“We expect short-term softness in physical demand, especially heading into the winter wedding season.”
China accounts for over 30% of global gold consumption, and its policy shifts often ripple across global pricing.
💰 50 Record Highs in a Year: Gold Still Shines in 2025
Even with the pullback, gold remains among 2025’s best-performing assets, up more than 42% year-to-date. The metal reached an all-time high of $4,127/oz in October amid a wave of safe-haven buying linked to ongoing Middle East tensions, U.S. political uncertainty, and volatile equity markets.
According to World Gold Council data, central banks have been net buyers for the 14th straight month, led by India, Turkey, and China, reinforcing the long-term bullish narrative.
“Every dip this year has been met with renewed institutional interest,” said Carlos Mendes, commodities head at BNP Paribas. “Investors are treating gold as the ultimate insurance policy against fiscal instability.”
🏦 Fed Rate Cut Hopes Cool — Pressure Builds
Adding to the downward momentum is fading optimism over U.S. Federal Reserve rate cuts. Comments from Fed Chair Jerome Powell last week suggested that policymakers remain data-dependent, signaling a slower path to monetary easing.
Higher-for-longer rates tend to strengthen the dollar and lift bond yields, reducing gold’s appeal since it offers no yield.
As a result, traders trimmed positions ahead of key U.S. non-farm payroll data due later this week.
“Gold’s recent rally was partially fueled by aggressive rate-cut bets,” noted Anita Chauhan, strategist at Kotak Securities.
“With those expectations cooling, it’s natural to see some short-term unwinding, though the long-term uptrend remains intact.”
🌍 Global Macro Snapshot
| Asset | Latest Price | 1D Change | YTD Change |
|---|---|---|---|
| Gold (Spot) | $3,975 | ▼ -1.3% | ▲ +42% |
| Silver (Spot) | $49.80 | ▼ -0.8% | ▲ +38% |
| U.S. Dollar Index | 104.3 | ▲ +0.2% | ▲ +3.1% |
| Brent Crude | $87.10/barrel | ▼ -0.4% | ▲ +7% |
| 10Y U.S. Treasury Yield | 4.38% | ▲ +0.05% | – |
Despite the dip, gold’s strong year-to-date performance continues to outperform equities, cryptocurrencies, and most commodities, underscoring its safe-haven strength in turbulent markets.
🪙 Investor Sentiment: From FOMO to Discipline
Analysts caution retail investors against panic selling, emphasizing the structural forces — geopolitical instability, de-dollarization, and central bank diversification — that still favor gold accumulation.
“Corrections like these are necessary for a healthy uptrend,” said Mihir Patel, analyst at Angel One. “Gold remains a long-term inflation hedge, not a short-term trading asset.”
Some fund managers view this as a “buy-the-dip opportunity”, particularly for those underexposed to commodities in their portfolios.
🔮 Outlook: Consolidation Before Next Breakout
Technically, gold has support near $3,940 and resistance around $4,050. Analysts expect consolidation between $3,900–$4,100 in the short term, before potentially resuming its upward march if U.S. inflation prints lower or geopolitical tensions escalate.
Despite near-term weakness, the precious metal’s broader trend remains bullish, driven by diversification demand from global reserves and investor caution amid an uncertain world economy.
🧭 Bottom Line
While today’s decline below $4,000/oz may spook short-term traders, gold’s unprecedented 50 record highs in 2025 underline its continued role as a cornerstone of financial security.
As policy, politics, and geopolitics remain in flux, gold’s glitter — though slightly dimmed this week — is far from fading.
