The US Federal Reserve kept interest rates unchanged at 3.75% to 4%, but two policymakers voted for an increase. Gold eased to about $4,039 an ounce in Asian trade on Thursday as traders weighed the chance of a rate rise in December.
At a glance
- Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack voted for a 25-basis-point increase.
- Traders see about a 78% chance of a December hike, down from 84% before the decision, according to CME's FedWatch tool.
- US inflation (PCE) and third-quarter GDP data are due on Thursday.
Background
Gold pays no interest, so higher interest rates make it less attractive than assets that do, such as bonds. The Fed says inflation remains elevated, and higher oil prices during the Middle East conflict have added to those concerns. A basis point is one-hundredth of a percentage point, so 25 basis points is 0.25%.
What happened
The Federal Open Market Committee voted 10-2 on Wednesday to keep the federal funds rate at 3.75% to 4%, as markets expected. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, preferring a 25-basis-point increase, Kitco and the Wall Street Journal reported.
The Fed said the economy is expanding at a strong pace but inflation remains elevated. Its statement gave no guidance on future rate moves.
How gold reacted
Spot gold fell 0.7% to $4,039.26 an ounce by 0044 GMT on Thursday as the dollar firmed, Reuters reported. Spot silver slid 0.7% to $53.60.
Traders now see about a 78% chance of a December rate rise, down from 84% before the decision, according to CME's FedWatch tool. Kitco put the odds at about 83%, little changed.
What comes next
Attention now turns to Thursday's US data on personal consumption expenditure (PCE) inflation, the Fed's preferred inflation gauge, and third-quarter GDP. Stronger growth or sticky inflation could firm up hike expectations and weigh on gold, while softer figures could support it.
Northlight Asset Management's Chris Zaccarelli said the Fed would probably have raised rates already if the meeting were not so close to next week's US midterm elections.
Our read
Outlook: bearish. The chance of a December rate rise keeps pressure on gold, which earns no interest.
What to watch
- US PCE inflation and third-quarter GDP data due on Thursday.
- The Fed's next meeting on December 8-9.
- Oil prices and Middle East tensions, which affect inflation expectations.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-10-28: The Fed holds rates at 3.75-4% in a 10-2 vote.
- 2026-12-08: The Fed's next two-day policy meeting begins.
What could lift prices
- The odds of a December hike fell slightly after the decision.
- Middle East tensions keep some safe-haven demand for gold.
What could weigh on prices
- Two Fed officials already want higher rates.
- A firmer dollar is weighing on gold.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | High | The Fed's rate path is the main driver of gold prices this week. |
| India | Medium | Indian gold prices follow global prices and the rupee-dollar rate. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Investment and Wealth Management | Neutral | Investors are waiting for inflation data before moving on gold. |
Who gains, who loses
- Holders of US dollar savings: Rates stay high, and a hike is still likely in December.
- Gold investors: The prospect of higher rates is limiting gold's recovery.
Other ways this could play out
- If PCE inflation comes in hot, December hike odds could rise and gold could fall below $4,000.
- If inflation cools, gold could recover as hike expectations fade.
Price risks
- Higher oil prices could push inflation and rate expectations up.
- A sharp rise in the dollar would weigh on gold.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
United States
India