Gold’s Surge Depends on Geopolitical Tensions Versus Hopes for Trade

On October 28, 2025, spot gold advanced to $3,980 per ounce, gaining 0.69% during the session as investors contended with a turbulent market influenced by evolving geopolitical events and mixed analyst projections. This uptick came after a sharp 3.2% recovery from the previous day's losses, which had been attributed to headway in U.S.-China trade discussions, according to a

. Despite this recent upswing, gold is still trading 8.1% below its all-time high of $4,378.69 per ounce reached in October, as noted by , reflecting a technical pullback after a 55% surge since the start of the year, fueled by safe-haven buying and central bank acquisitions, according to an .

The Reserve Bank of India's (RBI) robust gold accumulation has contributed to increased global demand, with India's gold holdings rising by $31 billion in the 2026 fiscal year, as reported by Business Standard. "This move is part of a broader effort to reinforce external reserves amid worldwide instability," a market observer commented. Nevertheless, Citi has moderated its short-term outlook, lowering its gold price target to $3,800 per ounce from $4,000, citing diminished uncertainty after trade negotiations between U.S. President Donald Trump and China's Xi Jinping, according to

. The bank also pointed to the possible resolution of the U.S. government shutdown and softer inflation expectations as factors that could weigh on gold prices.

Although Citi has adopted a more cautious view, other major banks remain divided over gold's future. JP Morgan and Societe Generale continue to project higher 2026 price targets of $4,753 and $5,000 per ounce, respectively, while HSBC and Bank of America expect gold to reach $4,600 and $5,000 by the end of 2025, according to the Reuters report. This divergence highlights the market's sensitivity to broader economic changes, with analysts noting that continued upward momentum will depend on persistent geopolitical and economic risks.

Geopolitical strife and U.S. monetary policy remain key drivers of sentiment. Gold's rally on October 28 coincided with expectations for a 25-basis-point rate cut by the Federal Reserve, spurred by weaker inflation numbers, the TradingView report indicated. At the same time, easing tensions in U.S.-China trade — a major factor in the October 17 sell-off — have renewed risk appetite, drawing funds away from traditional safe havens, The Economic Times observed. "For gold's bull run to persist through 2026, these ongoing concerns may need to become the baseline scenario,"

cautioned.

Gold's price swings have also impacted mining firms. First Quantum disclosed outstanding gold collar contracts with strike prices between $2,954 and $4,215 per ounce as of October 28 in the

, while Centerra Gold reported that its streaming deals would reduce its realized gold price to $2,655 per ounce in the fourth quarter of 2025, according to . These hedging strategies underscore the industry's vulnerability to price fluctuations, with companies like New Gold posting record free cash flow of $183 million in the third quarter of 2025 amid increased output, based on .

The relationship between gold and

has further complicated the market landscape. Recent analysis has linked gold's October downturn to a possible shift of capital into Bitcoin, with some experts suggesting the cryptocurrency could approach $200,000 if gold continues to lag, according to a . Still, this "digital gold" thesis remains speculative, as traditional safe-haven demand continues to anchor institutional interest in gold.

Technical analysis points to a pivotal moment for gold. Traders are monitoring the $4,000 mark as a crucial support level; a drop below could lead to further declines toward $3,838 per ounce, The Economic Times reported. On the other hand, a move above $4,160 might reignite bullish sentiment, according to the Economic Times forecast. The future direction will hinge on whether geopolitical tensions, central bank buying, and Fed policy continue to support gold's premium, or if optimism about trade and easing inflation takes precedence.