Gold Hits $4,000 for the First Time, RBNZ Cut Sends Kiwi Lower

Daily Market Insights – October 7, 2025, brought to you by Ultima Markets

RBNZ Surprise Cut Weighs on Kiwi Dollar

In a move that surprised markets, the Reserve Bank of New Zealand (RBNZ) today slashed its Official Cash Rate (OCR) by 50 basis points, lowering it to 2.50%, well beyond the consensus expectation of a 25 bp cut.

In its statement, the Monetary Policy Committee (MPC) cited:

• Weak growth and persistent spare capacity
• Easing inflation pressures that are trending toward the midpoint of the target
• Elevated global and trade policy uncertainties
• The current monetary conditions still being restrictive despite prior cuts
• That the scope and effectiveness of further easing will depend heavily on incoming data

Markets quickly re-priced a more aggressive easing path from the RBNZ. This surprise dovish pivot places downward pressure on the NZD, especially against major currencies that may be perceived as relatively stronger.

The NZD/USD pair extended its decline, now testing a six-month low following the RBNZ’s larger-than-expected rate cut.

To prevent further downside acceleration, the pair must hold above the key demand zone near 0.5755 — a break below this level could trigger a cascading sell-off.

Meanwhile, a stronger U.S. dollar combined with the RBNZ’s dovish tone continues to amplify weakness in the Kiwi. For now, downside risks remain dominant, with the next direction likely guided by domestic economic data such as inflation and retail spending.

If upcoming New Zealand data continue to deteriorate, NZD/USD is unlikely to stage any meaningful recovery in the near term.

Gold Hit 4,000 For the First Time

Gold continues to attract demand under the weight of macro uncertainty, geopolitical risk, and dovish expectations from major central banks.

News that gold prices have now pierced $4,000 has only reinforced the market’s confidence in further upside.

Technically, the bias remains bullish as long as gold holds above the key support zone between $4,000 and $3,985. This range continues to act as a critical base for the ongoing uptrend, keeping sentiment positive in the near term.

That said, gold is entering overbought territory, and the $4,000 psychological threshold may attract strong profit-taking, potentially triggering short-term volatility. However, until a clear reversal pattern forms on the near-term trend, the bullish outlook remains intact, with gold still poised for further upside momentum.

What to Watch for Now

• Reversal signals such as long upper wicks or momentum divergence near $4,000.
• A break below key support zones may trigger a phase of consolidation or pullback.
• Gold’s correlation with the U.S. dollar, real yields, and overall safe-haven flows will remain key drivers for direction.

Dollar Dynamic Remain Crucial

With global central banks — particularly the Federal Reserve — leaning more dovish, the U.S. dollar’s trajectory will continue to play a crucial role in shaping global market sentiment, influencing both commodity prices and major currency movements.

Persistent uncertainty surrounding the U.S. government shutdown, European political tensions, and broader geopolitical risks is sustaining a cautious tone in markets, driving investors toward safe-haven assets such as gold and, more recently, the U.S. dollar, amid falling Treasury yields.

Technically, the U.S. Dollar Index (DXY) has regained strength above the 97.5–98.5 zone, an area we highlighted earlier as key resistance. A decisive break above this range could confirm renewed bullish momentum, potentially setting the stage for further upside in the near term.

Disclaimer

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