Gold edged down to about $4,153 an ounce early on Friday, giving back part of Thursday's rally, and was set for a weekly loss as hot US inflation data kept the risk of another Federal Reserve rate hike high.
At a glance
- US producer prices rose 1.3% in September, the biggest monthly jump since March 2022.
- Traders see a 28% chance of a Fed hike this month and 93% by December, CME data show.
- Silver, platinum and palladium were all also heading for weekly losses.
Background
Gold pays no interest, so higher interest rates make it less attractive than bonds or deposits. The US Federal Reserve (Fed) has been raising rates this year to fight inflation driven by high energy prices. Each new inflation report changes how likely traders think another hike is, which moves gold.
What happened
Spot gold fell 0.4% to $4,152.99 an ounce in early Asian trade on Friday, Reuters reported via The Economic Times. It was on track for a weekly fall. US gold futures for December rose 0.1% to $4,173.90.
The dip followed a strong Thursday. Gold rose about 1.6% to near $4,169 in late US trade, and silver jumped more than 3% to around $57.31, Kitco reported. On Friday, silver eased 0.6% to $57.09, platinum slipped to $1,624.05, and palladium edged up to $1,128.70.
Why gold is swinging
Inflation keeps surprising on the upside. US producer prices rose 1.3% in September and 6.3% from a year earlier, led by a 10.8% jump in energy prices. That came a day after consumer prices rose 0.6% in the month. Faster inflation makes another Fed hike more likely, which weighs on gold.
Thursday's rally came from the bond market. A selloff in AI-related stocks and credit sent investors into US Treasuries, and the 10-year yield fell about 10 basis points to 5.09%, its biggest daily drop since August 2025. Lower yields reduce the cost of holding gold, so prices rose.
What comes next
Fed officials sound worried. Chicago Fed President Austan Goolsbee called the inflation data "discouraging". Cleveland Fed President Beth Hammack said the Fed might need to hike more aggressively if public inflation expectations deteriorate.
Traders now await remarks from Fed Chair Kevin Warsh at the IMF meetings in Bangkok, the last before the Fed's quiet period ahead of its October 27-28 meeting. Gold has fallen by more than a fifth since the US-Iran war began in late February, Bloomberg noted, as the conflict lifted energy prices and pushed central banks to tighten.
Our read
Outlook: bearish. Hot inflation data keep a December Fed hike likely, which weighs on gold. Lower bond yields and safe-haven buying could limit the downside.
What to watch
- Fed Chair Kevin Warsh's remarks at the IMF meetings in Bangkok.
- The Fed's October 27-28 policy decision.
- US 10-year Treasury yields, which drove Thursday's rally.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-10-14: US consumer prices rise 0.6% in September, and gold drops to a one-week low.
- 2026-10-15: US producer prices jump 1.3%, but falling Treasury yields lift gold about 1.6%.
- 2026-10-16: Gold eases 0.4% to $4,152.99 in Asian trade, heading for a weekly loss.
Inflation
US producer prices rose 6.3% from a year earlier, led by energy, keeping pressure on the Fed.
Interest Rates
Markets price a 93% chance of a December Fed hike, which raises the cost of holding non-yielding gold.
Geopolitical Risks
The US-Iran conflict keeps energy prices high, feeding inflation and supporting some haven demand.
What could lift prices
- A selloff in AI-linked stocks and credit is driving haven demand into bonds and gold.
- The 10-year Treasury yield fell to 5.09%, lowering the cost of holding gold.
What could weigh on prices
- US producer prices rose at the fastest monthly pace since March 2022.
- Fed officials have signalled that more aggressive hikes are possible.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | High | Its inflation data and Fed decisions are driving gold's direction. |
| India | Medium | Global price swings feed into domestic gold prices just before the festive season. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Gold Mining | Negative | A weekly price drop trims miners' margins after gold's fall since February. |
Who gains, who loses
- Jewellery buyers: Gold is well below its levels before the US-Iran war began.
- Gold investors: Rate hike expectations keep pressure on prices after a weak week.
Other ways this could play out
- If Warsh sounds less hawkish, gold could rebuild Thursday's gains above $4,170.
- If he signals an October hike, gold could test last week's lows near $4,100.
Price risks
- A renewed AI-led market selloff could revive haven buying.
- A further rise in energy prices could push inflation and yields higher.
Historical comparison
- August 2025: Thursday's 10-basis-point drop in the 10-year yield was its largest daily decline since August 2025.
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