Gold Bounces Back: Here's What's Actually Driving the Rally

Gold just staged a comeback after getting hammered over the past week. October futures closed up $17.50 (0.4%) to $3,983.70/oz, snapping a losing streak that had pushed prices to 2-week lows. The bounce? Traders are basically playing the dip—picking up gold on the cheap.

But here’s the thing: the real catalysts haven’t gone anywhere. Geopolitical risk is still simmering, the dollar keeps looking shaky under US policy pressure, and everyone’s betting the Fed will keep cutting rates. Central banks are still hoovering up gold like it’s going out of style.

The Fed Wildcard

Markets are pricing in an 85.4% chance of a 0.25% rate cut in December (via CME FedWatch). That said, the outlook for 2026 is cloudier—investors want Powell’s post-meeting comments to figure out if cuts keep flowing next year.

Economic Speed Bump

Pending home sales came in flat in September (index stuck at 74.8) when economists expected a 1% jump. August had surged 4.2%, so this is a notable slowdown in housing activity. That said, pending sales typically close 4-6 weeks later, so watch the actual closings data.

Bottom Line: Gold’s safe-haven appeal is intact, but it’s volatile—this rally could easily reverse if risk sentiment shifts. The Fed’s next moves will matter more than anything else.