Gold Lose $4000 as Dollar Gain, Oil Risk Premium Fades

Daily Market Insights – October 10, 2025, brought to you by Ultima Markets

Fed Signals Mixed Tone, Ceasefire Eases Risk Premium

Recent commentary from Federal Reserve officials highlights a growing policy divide, tempering expectations for aggressive easing going into 2025.

• Fed Governor Michael Barr urged caution, warning that inflation risks remain elevated and that the Fed must avoid overreacting with excessive rate cuts.
• NY Fed President John Williams expressed support for additional cuts later this year amid labor market weakness, though he emphasized a prudent, data-dependent approach.
• The September rate cut was framed as “risk management,” with the dot plot leaving room for further easing — but the language signals a meeting-by-meeting strategy.

Meanwhile, geopolitical risk eased slightly after Israel and Hamas agreed to a phased ceasefire, lowering the war-linked risk premium in gold and oil markets.

However, Ultima Markets Analysts noted that while the ceasefire reduces immediate disruption concerns, it does not change the underlying supply-demand dynamics in either market.

Dollar Marks Fourth Consecutive Day of Gains

The U.S. dollar extended its winning streak to a fourth straight session, supported by cautious Fed messaging and a more cautious tone.

The split among Fed officials over the pace of further cuts has helped reinforce dollar strength, which is likely to persist unless a major data surprise — particularly on inflation — shifts market expectations.

According to the latest reports, the U.S. Bureau of Labor Statistics (BLS) is recalling staff to compile the upcoming CPI report, which is expected to be released on schedule next week. This data release is seen as a key catalyst for the dollar’s next directional move.

USDX, Daily Chart | Source: Ultima Markets MT5

Over the U.S. Dollar Index (USDX) outlook, the index has broken above the 97.5–98.5 resistance zone, signaling that a bullish reversal is building momentum. It has now regained the 99.00 level, reinforcing upside sentiment.

If the dollar is able to hold above this breakout zone, further gains are likely, with the next key upside target near the 100.00 mark.

Gold Loses Ground at $4,000

Gold staged a sharp pullback yesterday after retesting its record high of $4,059 in the latter session, followed by a steep decline before the U.S. close. This retreat came as the dollar regained strength and the war-linked risk premium eased, testing the resolve of gold buyers.

The loss of the $4,000 level signals that short-term exhaustion may be emerging, opening the door to a deeper corrective move. For now, $4,000 remains the critical battleground between bulls and bears.

XAU/USD, H1 Chart | Source: Ultima Market MT5

From a technical perspective, a double top pattern has formed on the 1-hour chart, with $4,000 acting as the neckline. A sustained break and hold below this key zone would signal increased selling pressure, while failure to reclaim the $4,000 level could further weigh on bullish momentum.

Risk Premium Eases — More to Come?

Oil prices softened as the Gaza ceasefire reduced war-related risk premiums, but the move remains temporary as underlying supply-demand dynamics continue to dominate the market narrative.

UKOIL, Daily Chart | Ultima Market MT5

Technically, the oil outlook remains bearish, with Brent hovering near multi-year lows, with key resistance around $65–66. A failure to reclaim this level would keep downside pressure intact.

Similarly, WTI (USOIL) faces resistance near $62, and without a breakout above this level, the bearish bias remains in place.

Near-term, any renewed geopolitical escalation or fresh OPEC+ measures could offer a temporary upside catalyst, but absent such developments, the path of least resistance remains lower.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.