Gold prices rose by more than 1% in European trading on Wednesday, heading back toward the 4,000-dollar-per-ounce level and on track to record their first gain in four sessions, supported by renewed safe-haven demand amid heavy losses in global equity markets.

Prices were also boosted by a pause in the U.S. dollar’s rally against a basket of major currencies ahead of key U.S. labor-market data expected to provide further clues about the likelihood of a Federal Reserve rate cut in December.

Price Overview

• Gold prices today: Spot gold rose by about 1.4% to $3,987.15 per ounce, from an opening level of $3,932.04, after touching a session low of $3,929.97.

• At Tuesday’s close, gold fell 1.75%, marking a third consecutive daily loss as doubts grew over the probability of a December rate cut.

Global Stock Losses

Following sharp declines in U.S. equities on Wall Street amid mounting concerns about excessive valuations in artificial-intelligence stocks, global markets saw broad-based losses as selling accelerated and worries about the sustainability of recent record gains deepened.

As a result, investors turned to traditional safe-haven assets such as gold, the Japanese yen, and U.S. Treasuries in an effort to hedge against heightened volatility in equity markets.

U.S. Dollar

The U.S. Dollar Index fell 0.15% on Wednesday, pulling back from a three-month high of 100.25 points, reflecting a pause in the dollar’s upward momentum against major and minor currencies.

Beyond profit-taking, the dollar retreated ahead of key U.S. data later today on private-sector employment, with official economic reports still delayed due to the second-longest government shutdown in U.S. history.

U.S. Interest Rates

• According to the CME FedWatch tool, market pricing for a 25-basis-point rate cut at the December FOMC meeting remains steady at 72%, while expectations for no change stand at 28%.

• Investors await the release of October private-sector employment data later today to reassess rate-cut probabilities.

Gold Outlook

Carsten Minki, analyst at Julius Baer, said the recent shift toward risk aversion in financial markets, driven by growing concerns about stock-market valuations, is helping gold stabilize after retreating from record levels.

Minki added that physical demand for gold remains strong from both safe-haven buyers and emerging-market central banks.

SPDR Fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 3.15 metric tons on Tuesday to 6,378 metric tons, the lowest level since October 29.

U.S. stock indexes fell on Tuesday, deepening losses as concerns over stretched valuations in artificial intelligence companies weighed heavily on the market. Warnings from Wall Street giants also fueled fears that equities could be heading for a correction.

Global markets may be nearing a pullback after a relentless rally this year. Executives from Goldman Sachs and Morgan Stanley cautioned investors on Tuesday to prepare for a potential market decline within the next two years.

Global equities have risen to record highs in 2025, driven by strong gains in AI-related stocks and expectations of lower interest rates. Last month, major U.S. indexes reached new peaks, while Japan’s Nikkei 225 and South Korea’s Kospi also hit record levels. China’s Shanghai Composite climbed to its highest point in a decade, supported by easing trade tensions between the U.S. and China and a weaker dollar.

Goldman Sachs CEO David Solomon, speaking at the Global Investment Leaders Summit in Hong Kong, said: “We’re likely to see a 10% to 20% decline in equity markets within the next 12 to 24 months.” He added: “Markets move higher and then reset to allow investors to reassess valuations.”

Solomon emphasized that such cyclical pullbacks are a normal part of long-term bull markets, noting that the bank’s consistent advice remains to stay invested and rebalance portfolios rather than attempt to time the market. “A 10% to 15% market drop happens frequently, even during periods of economic growth,” he said. “That doesn’t change the structural outlook for capital allocation.”

Morgan Stanley CEO Ted Pick echoed that sentiment, saying investors should welcome corrections as a sign of a healthy market, not a financial crisis. “We should embrace 10% to 15% pullbacks as long as they’re not triggered by a major economic shock,” he said.

Their comments followed warnings from the International Monetary Fund about the risk of a sharp correction, as well as concerns voiced by Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey about excessive equity valuations.

Why are correction warnings increasing?

Tech stocks have become a major drag on the Nasdaq, with six of the “Magnificent Seven” — the leading AI-driven stocks behind this year’s rally — declining in the latest session. The Philadelphia Semiconductor Index (SOX) fell 4%.

JPMorgan Chase CEO Jamie Dimon had also warned last month of rising risks of a major correction within six months to two years, citing geopolitical tensions as a key factor.

Chuck Carlson, CEO of Horizon Investment Services in Indiana, said: “Investors appear more concerned about valuations now than they have been recently, at least in this session.” He added: “Many of these companies have very high valuations, while their earnings are strong but not extraordinary — the perfect setup for profit-taking.”

Meanwhile, the partial U.S. government shutdown — now close to becoming the longest in history — has halted the release of official data, forcing markets to rely on private indicators such as the ADP employment report due Wednesday.

Investors are also parsing remarks from Federal Reserve officials for clues on how the central bank will shape policy amid the data blackout.

Bright spots in Asia

Both U.S. banks pointed to Asia as a key area of optimism in the years ahead, supported by recent developments such as the U.S.–China trade deal.

Goldman Sachs expects global investors to continue channeling capital into China, emphasizing that it remains one of the world’s largest and most vital economies.

Morgan Stanley remains bullish on Hong Kong, China, Japan, and India, highlighting their unique growth narratives — from Japan’s corporate governance reforms to India’s infrastructure expansion — as long-term investment themes.

“It’s hard not to feel optimistic about Hong Kong, China, Japan, and India,” Pick said. “Four very different stories, but all part of the same broader Asian growth narrative.”

He added that China’s artificial intelligence, electric vehicle, and biotechnology sectors stand out as the main growth drivers in the coming years.

The euro rose in European trading on Wednesday against a basket of global currencies, attempting to recover from a three-month low against the U.S. dollar. The single currency is on track for its first gain in six sessions, supported by buying activity at lower levels and by the pause in the dollar’s recent rally in foreign-exchange markets.

Easing inflation across Europe in October reduced pressure on European Central Bank policymakers and revived expectations for a potential rate cut in December.

Price Overview

• EUR/USD rate today: The euro rose 0.15% to 1.1498 dollars from the opening level of 1.1482, after touching an intraday low of 1.1477.

• On Tuesday, the euro fell 0.3% against the dollar—its fifth straight daily loss—hitting a three-month low at 1.1473 amid persistent selling pressure.

U.S. Dollar

The dollar index fell 0.15% on Wednesday, retreating from a three-month high of 100.25 points, reflecting a pause in the U.S. currency’s recent uptrend against major and minor peers.

Beyond profit-taking, the dollar eased ahead of key U.S. data due later in the day on private-sector employment in October, which is expected to offer fresh insight into labor-market conditions.

Negative Pressure

Despite the euro’s current rebound, the common currency remains under downward pressure as investors continue to favor the U.S. dollar as the most attractive asset in the market. Persistent concerns over a prolonged interest-rate gap between the U.S. and Europe also weigh on sentiment.

European Interest Rates

• Data released late last week confirmed a slowdown in headline inflation across the euro area in October, as expected, while core inflation remained sticky—reducing pressure on the ECB to maintain its restrictive stance.

• Following those figures, money-market pricing for a 25-basis-point ECB rate cut in December rose from 10% to 25%.

• Investors now await further economic data from Europe and comments from ECB officials to reassess the outlook for monetary policy.

The Japanese yen rose in Asian trading on Wednesday against a basket of major and minor currencies, extending gains for the second consecutive session against the U.S. dollar. The move reflects a continued recovery from its eight-month low, supported by safe-haven demand amid a broad sell-off in global equity markets.

Minutes from the Bank of Japan’s September meeting showed that a growing number of policymakers believe conditions are now suitable for policy normalization, boosting expectations for a potential rate hike in December.

Price Overview

• USD/JPY rate today: The dollar fell 0.45% to 152.96 yen, down from the opening level of 153.66, after touching a session high of 153.75.

• The yen closed Tuesday up 0.35% against the dollar, rebounding from an eight-month low of 154.48 earlier in the session.

Severe Losses

Following the sharp drop in U.S. equities on Wall Street amid mounting concerns about excessive valuations in artificial intelligence companies, global markets witnessed a widespread sell-off. The downturn triggered intensified selling pressure and heightened worries about the sustainability of recent record highs.

As a result, investors flocked to safe-haven assets such as gold, the Japanese yen, and U.S. Treasury bonds to hedge against increased volatility, while markets closely monitor statements from major central banks for signs of potential intervention or policy adjustments to calm the turmoil.

Bank of Japan

According to the minutes released Wednesday, an increasing number of Bank of Japan policymakers believe the conditions are ripe for a rate hike, with two members calling for an immediate increase.

During the two-day meeting ending September 19, the nine-member board kept interest rates steady at 0.5% for the fifth consecutive time, rejecting proposals from two hawkish members to raise borrowing costs to 0.75%.

With discussions now focused on the precise timing of the next hike, several members said it would not be too late to wait for “more accurate data” before acting.

The minutes highlight growing momentum within the board toward resuming rate hikes, as concerns ease that higher U.S. tariffs could derail Japan’s fragile economic recovery.

Japanese Interest Rate Outlook

• Although Bank of Japan Governor Kazuo Ueda sent his strongest signal yet last week that a rate hike could come in December, markets remain cautious about the central bank’s gradual approach.

• The probability of a 25-basis-point rate increase at the December meeting rose from 50% to 60%.

• Investors now await additional data on inflation, unemployment, and wage trends to reassess the outlook for monetary policy in Japan.