Key points gold fed decision
- The Fed held rates at 3.75–4.00% on 28 October in a 10–2 vote. Two officials wanted an immediate hike.
- Spot gold fell about 0.7% to near $4,038 on Thursday, after failing to break above $4,074.
- Markets price roughly a 78–85% chance of a Fed hike in December, which keeps pressure on gold.
- Next test: US PCE inflation and Q3 GDP at 18:00 IST today.
What happened
The Fed kept rates unchanged, as expected. Governor Lisa Cook and Cleveland Fed President Beth Hammack both voted for a quarter-point hike right away. Chair Kevin Warsh said the September hike’s “monetary medicine” is starting to work and that the Fed remains committed to its 2% target.
| Market | Level | Move |
|---|---|---|
| Spot gold, Wed 28 Oct | $4,039.39 | −0.5% |
| Spot gold, Thu 29 Oct (10:21 IST) | $4,038.49 | −0.7% |
| US December gold futures | ~$4,049.80 | Steady |
| Silver and platinum | – | Both −1.5% |
| MCX December gold | ₹1,43,620 per 10 g | −0.06% |
| Gold in October so far | – | About −2.5% |
Gold had risen for three straight sessions before Thursday’s drop, helped by lower oil prices on Wednesday. It briefly fell to about $4,035 right after the decision, then recovered toward $4,056 before slipping again. It is heading for a second straight monthly loss.
Why it matters
Higher rates are gold’s main headwind. Gold pays no interest, so when markets expect higher rates, holding it becomes more costly compared with bonds. The two hawkish dissents strengthened expectations of a December hike, which weighed on gold.
The dollar reaction was mixed. The dollar slipped about 0.2% after Warsh’s press conference, which would normally help gold. But it regained ground on Thursday, adding to gold’s losses.
Oil feeds inflation fears. Higher oil prices weighed on gold on Wednesday by reviving inflation concerns. Brent is trading near $114 , which keeps the Fed’s focus on inflation.
Gold is falling less than rates alone would suggest. One analysis noted gold still holds above $4,000 despite high December hike odds, pointing to central-bank buying and safe-haven demand. Gold remains far below its January record above $5,600.
Key XAU/USD levels
| Level | Price | Why it matters |
|---|---|---|
| Resistance | $4,074–4,079 | Trendline rejection after the Fed |
| Pivot | ~$4,056 | Thursday’s early recovery high |
| Support | $4,025–4,035 | Key support base tested after the decision |
| Support | $4,000 | Psychological level |
| Support | $3,975–3,977 | Three-month low set on 23 October |
Three scenarios for gold
| Scenario | What it looks like | Likely gold reaction |
|---|---|---|
| 1. Hot PCE / strong GDP | Inflation stays sticky and growth is solid, so December hike odds rise further. | A break below $4,025 is likely to bring $4,000 and $3,975 into focus. |
| 2. In-line data (base case) | No major surprise; markets wait for the midterms and November data. | Gold may stay in a range between about $4,025 and $4,075. |
| 3. Soft PCE / weak GDP | Inflation cools or growth disappoints, so December hike bets fade. | A move above $4,079 could open the way toward $4,100+, as yields and the dollar ease. |
Other swing factors: Middle East headlines and oil prices, the 3 November US midterms, and any surprise from the BoJ on 30 October.
Gold can move $20–40 in minutes around US data. Use our XAU/USD Pip Calculator to check what each move is worth for your lot size.
Impact on Indian traders
MCX gold: MCX December gold futures slipped 0.06% to ₹1,43,620 per 10 grams on Thursday. The fall was smaller than in global prices, partly because of rupee moves. MCX gold depends on both XAU/USD and USD/INR. A weaker rupee raises local gold prices even when global prices fall.
USD/INR: A firmer dollar and high oil prices keep pressure on the rupee, which cushions MCX gold.
Retail gold prices: FXStreet’s data showed India gold at about ₹12,359 per gram on Thursday, down from ₹12,454 on Wednesday. Jewellery prices are higher once GST and making charges are added.
Currency pairs on NSE: NSE lists USD/INR, EUR/INR, GBP/INR and JPY/INR, plus EUR/USD, GBP/USD and USD/JPY. Trading gold or forex CFDs with unauthorised offshore platforms is not permitted under FEMA.
Gold often moves with global risk appetite. Our Risk-On / Risk-Off Meter can help you gauge the mood.
What to watch next
| Date (IST) | Event | Why it matters for gold |
|---|---|---|
| Thu, 29 Oct, 18:00 | US Q3 GDP (advance) and September PCE | The next major test for December hike odds |
| Thu, 29 Oct, 18:45 | ECB decision | Affects the dollar via EUR/USD |
| Fri, 30 Oct | BoJ decision | Yen and global yields |
| Tue–Wed, 3–4 Nov | US midterm elections | Fiscal outlook; possible safe-haven flows |
| Fri, 6 Nov | US October jobs report | Labour market before December |
| Tue–Wed, 8–9 Dec | FOMC, with new projections | Where a hike is mostly priced |
Track all release times on our Economic Calendar, and find more coverage in Market Analysis & News. Related: Gold price outlook this week, FOMC October 2026 preview
FAQs
How did gold react to the Fed decision in October 2026?
Spot gold slipped about 0.5–0.7%, to near $4,038–4,039, after the Fed held rates in a 10–2 vote with two officials favouring a hike.
Why does a Fed rate hike hurt gold?
Gold pays no interest. Higher rates make interest-paying assets more attractive and often lift the dollar, both of which tend to weigh on gold.
What are the key gold levels after the Fed?
Support is at $4,025–4,035, then $4,000 and $3,975. Resistance is at $4,074–4,079.