Gold prices slip as Fed hold and inflation outlook weigh on bullion

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Gold prices slip on Fed

Highlights

Spot gold drops 0.7% to $4,037.98 an ounce after the Federal Reserve holds rates at 3.75%–4.00% and delays decisions awaiting inflation data.
Traders price in a lower probability of a December rate hike—78% versus 84% pre-announcement—while PCE inflation data due at 1230 GMT remains in focus.
The World Bank forecasts global commodity prices rising 23% in 2026 amid higher energy costs and shipping disruptions, boosting safe-haven demand including gold.

Fed pause and inflation data in focus

As reported by Reuters, spot gold falls 0.7% to $4,037.98 an ounce by 0410 GMT, while U.S. gold futures for December delivery are steady at $4,049.80.

The Federal Reserve keeps rates unchanged on Wednesday at 3.75% to 4.00%, in line with market expectations, and delays any change in borrowing costs until after next week's U.S. midterm elections as it waits for more inflation data. Traders now price in about a 78% chance of a December rate hike, down from 84% before the announcement, according to CME's FedWatch Tool.

Ajay Kedia, director at Mumbai-based Kedia Commodities, says the day's decline is driven by persistent Middle East uncertainty and market positioning ahead of the inflation figures. Higher interest rates typically raise the opportunity cost of holding non-yielding bullion, making gold less attractive to investors.

Geopolitical risks and broader commodity trends

Markets are also watching the Personal Consumption Expenditures data due at 1230 GMT, a key inflation gauge for the Fed as it targets a 2% inflation rate. At the same time, the World Bank says global commodity prices are set to surge 23% in 2026, citing higher energy prices, cargo shipping disruptions during the Middle East war, grain shipment problems in the Black Sea and strong demand for safe-haven assets such as gold.

Separately, Hong Kong Census and Statistics Department data show China's net gold imports via Hong Kong in September rise more than 28% from August to a five-month high. On the geopolitical front, the Wall Street Journal reports that U.S. Vice President JD Vance sends a letter to Iranian Security Council chief Mohsen Rezaei in a bid to revive peace negotiations.

Among other precious metals, spot silver falls 1.5% to $53.15 an ounce, platinum drops 1.5% to $1,515.70 and palladium slips 0.6% to $1,004.25.

In our earlier article on UBS extending its Fed tightening-cycle forecast, we covered the bank’s view that persistent inflation could keep the central bank on a higher-for-longer path, with additional hikes still on the table beyond December. We also noted how stronger inflation readings and supply-side risks were influencing rate expectations reflected in FedWatch pricing—context that helps explain why today’s gold market is so sensitive to incoming inflation data and any shifts in the Fed’s policy outlook.

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