Key Takeaways
- Gold prices experienced a modest corrective bounce following the Federal Reserve's latest "hawkish cut" of 25 basis points, with the yellow metal initially dipping below $4,000 per ounce before recovering as Fed Chair Jerome Powell signaled caution on future easing.
- China has officially excluded electric vehicles (EVs) from its 15th five-year development plan (2026-2030), marking the end of a decade of significant state subsidies and signaling a shift towards market-driven growth for the sector.
- The removal of Chinese EV subsidies is expected to intensify the industry's focus on international exports, as manufacturers seek to mitigate domestic oversupply and fierce competition, with China's EV exports already reaching nearly $48 billion in 2025.
- Despite immediate market volatility, central banks continue to bolster gold's long-term outlook through robust purchases, adding 220 tons in Q3 2025—a 28% increase over the previous quarter—underscoring its role as a hedge against global uncertainties.
Gold prices witnessed a modest corrective bounce on Thursday, October 30, 2025, after an initially negative reaction to the Federal Reserve's latest policy announcement. The Fed delivered a widely anticipated 25-basis-point interest rate cut, bringing the federal funds rate target range to 3.75%-4.00%. However, Fed Chair Jerome Powell's accompanying remarks struck a "hawkish" tone, indicating that a further rate reduction in December is "not a foregone conclusion". This unexpected nuance led to an initial tumble in gold from above US$4,000 to around US$3,900 before a recovery during Asian and European trading sessions.
The U.S. dollar index strengthened by approximately 0.5% to 99.2, reaching a two-week high, which typically exerts downward pressure on gold. Despite this, falling U.S. Treasury yields and ongoing geopolitical tensions provided some support for the yellow metal. December gold futures were last reported down $16.50 at $3,984.70, while spot gold hovered around $3,995. Analysts suggest gold may consolidate between $3,870/oz and $4,100/oz in the near term. The long-term bullish sentiment for gold is reinforced by continued central bank demand, with 220 tons purchased in the third quarter of 2025, marking a 28% increase over the preceding quarter and bringing year-to-date additions to 634 tons.
Meanwhile, a significant policy shift is underway in China's electric vehicle (EV) sector. For the first time in over a decade, China has excluded EVs from its list of strategic emerging industries in its 15th five-year development plan for 2026-2030. This omission signals Beijing's intention to phase out lucrative state-backed subsidies that have fueled the industry's rapid growth and made China the world's largest EV market. The move is interpreted by industry analysts as a push for market forces to dictate the sector's future, leading to a much-needed "downsizing and rationalisation" of an overcrowded market with over 150 manufacturers.
The policy pivot is expected to bring China's burgeoning EV exports to the forefront. Facing intense domestic competition and oversupply, Chinese EV manufacturers like BYD (BYDDF), NIO (NIO), and others have increasingly focused on international markets. In 2025, China's EV exports soared to nearly $48 billion, reaching over 200 countries. While China ended its national EV purchase subsidy scheme in 2022 and plans to phase out purchase tax rebates by 2027, the industry's maturity is evident in record sales, with 1.6 million New Energy Vehicles (NEVs) sold in September 2025, capturing a 49.7% market share. This strategic shift could open new opportunities for rival automakers in foreign markets previously saturated by low-cost Chinese exports.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.