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Safe-Haven Rush: Gold Soars, Rupee Recovers, Dollar Momentum Fades

Forex Market Pulse — October 16, 2025

Gold extends its record run as rate-cut bets and geopolitical tension boost safe-haven demand; RBI steps in to steady the rupee while USD/JPY momentum looks stretched.

Today’s Snapshot

  • Gold: Printed fresh all-time highs (spot peaked above $4,240/oz) before easing, supported by Fed cut expectations and U.S.–China trade frictions.
  • INR: The rupee jumped after reported RBI dollar sales in spot and NDF markets.
  • Majors: USD/JPY and USD/CAD show overbought traits; EUR/USD faces layered resistance near 1.1680–1.1730.

What’s Moving Markets

Safe-haven bid fuels bullion. Ongoing trade tension and a prolonged U.S. data vacuum have markets leaning into rate-cut narratives, lifting gold and capping broad USD upside. Analysts note central-bank buying and de-dollarization themes as secondary tailwinds.

RBI support steadies the rupee. Multiple dealers report sizeable FX sales by India’s central bank this week, flipping options skews in favor of INR for the first time in years and forcing out speculative long-USD positions.

Dollar tone mixed across G10. Momentum screens flag stretched conditions in USD/JPY and USD/CAD; a pause in yields or policy headlines could spark mean-reversion bursts.

Quick Technical View

  • XAU/USD: Bullish above the breakout zone; shallow dips toward prior highs would keep the uptrend intact while momentum cools.
  • USD/JPY: Trend strong but overbought; watch for intraday failure swings near recent highs that could trigger a corrective pullback.
  • EUR/USD: Resistance stacked ~1.1680–1.1730; support zones ~1.1600–1.1560/1.1480 on fades.

What to Watch Next

  1. Fed speakers and any guidance on the timing/size of cuts.
  2. Gold’s ability to hold above the prior record area after the spike.
  3. Further INR follow-through (or not) if RBI steps back.
  4. Yield moves and their impact on USD/JPY overbought conditions.

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Sources