Gold Pulls Back, US-China Strike Another Trade Deal

Daily News Nuggets | Today’s top stories for gold and silver investors
October 27th, 2025 

Inflation at 3%, Fed Plans to Continue with Rate Cuts 

Consumer prices rose 3.0% in September, coming in below the 3.1% economists had forecast and offering a rare bit of relief for markets bracing for worse. Gas prices drove most of the monthly increase, jumping 4.1% as pump prices hit their highest levels since mid-2023. Food and shelter costs also climbed, though at a slower pace than August. 

The inflation reading came after a three-week delay due to the federal government shutdown — making it the only major economic data released this month. Friday’s report likely greenlights the Federal Reserve to cut interest rates at this week’s policy meeting. Stocks rallied on the news, hitting fresh highs. 

That softer-than-expected data has all but locked in the central bank’s next move. 

Fed Rate Cut All But Certain This Week 

The Federal Reserve meets Wednesday and is virtually guaranteed to cut interest rates by a quarter-point, lowering its benchmark range to 3.75%-4.00%. Markets are pricing in a 97% probability following Friday’s cooler inflation print. Fed Chair Jerome Powell has signaled growing concern about labor market weakness, even as inflation remains stubbornly above the central bank’s 2% target. 

The challenge: support economic growth without reigniting price pressures. This will be a “standard” meeting — no new economic projections or press conference — making Wednesday afternoon’s policy statement the main event for clues about December and beyond. For precious metals investors, rate cuts reduce the opportunity cost of holding gold and silver, though silver remains more sensitive to industrial demand and economic growth concerns. 

While the Fed navigates inflation at home, President Trump is managing another economic flashpoint overseas. 

US-China Strike Preliminary Framework Trade Deal — Again 

The world’s two largest economies reached another preliminary trade agreement over the weekend in Malaysia, averting — for now — a potentially catastrophic escalation in their ongoing tariff war. US Treasury Secretary Scott Bessent confirmed that negotiators eliminated President Trump’s threatened 100% tariff on Chinese goods set to take effect November 1, while China agreed to delay its rare earth export restrictions for at least a year. 

The framework includes China resuming purchases of American soybeans — a major win for Midwest farmers — and cooperation on fentanyl interdiction efforts. The deal still requires approval from Trump and Chinese President Xi Jinping, who meet Thursday in South Korea during the APEC summit. Markets welcomed the détente, though analysts warn the fundamental disputes driving the trade war remain unresolved — and past framework agreements have fallen apart before finalizing. 

The trade breakthrough — assuming it holds — combined with the Fed’s dovish stance, triggered sharp moves in precious metals markets. 

Precious Metals Consolidate After Wild Swings 

Gold and silver are catching their breath after last week’s historic volatility. Gold pulled back to around $4,040 per ounce Monday after testing $4,400 resistance multiple times last week, while silver retreated to around $47 following its biggest single-day drop since 2021. The corrections came as trade tensions between the US and China eased and the dollar strengthened, prompting profit-taking on metals’ stunning 2025 rally — gold is still up 52% year-to-date, silver up roughly 62%.  

Technical analysts note gold found support near the $4,000 level, a psychologically important threshold after its parabolic climb from August lows. Despite the pullback, Goldman Sachs maintains its $4,900 gold forecast for year-end 2026, while JPMorgan sees $6,000 by 2029. The fundamental drivers remain intact: persistent inflation above target, geopolitical uncertainty, central bank buying, and concerns about mounting US debt. Most strategists view the recent dip as a healthy consolidation rather than the start of a bear market. 

Even as markets digest global economic developments, a domestic crisis is reaching a critical inflection point. 

Shutdown Enters Fourth Week as Food Aid Cutoff Looms 

The federal government shutdown hit day 27 Monday, and November 1st is shaping up as a make-or-break moment. Starting Friday, an estimated 42 million Americans will lose SNAP benefits — the nation’s largest anti-hunger program — after the Agriculture Department confirmed funding has “run dry.” States including Texas and Pennsylvania have already warned residents that November food assistance won’t arrive.  

The crisis extends beyond SNAP: 7 million mothers and young children depend on WIC, which faces its own funding cliff around November 1st, while military families risk missing paychecks without another Pentagon budget maneuver. The shutdown has already furloughed 750,000 workers daily, halted critical economic data releases, and closed national parks across the country.  

The only data to escape the blackout was September’s inflation report, released Friday to meet Social Security requirements. Some lawmakers are expressing alarm about Trump’s expanding Caribbean military operations during the budget impasse, though the president remains abroad for his Asia trip rather than engaging in shutdown negotiations back home.