Both gold and silver edged lower in Wednesday’s trade on October 28 as investors cautiously awaited the US Federal Reserve’s policy decision later in the day. Markets were largely pricing in the possibility of the Fed keeping interest rates unchanged.
MCX gold futures for December delivery were down 0.15%, or ₹213 per 10 grams, at ₹1,43,925 at the time of writing. The metal had closed higher in the previous two trading sessions. Silver futures also traded lower, declining by nearly ₹2,000 per kilogram to ₹1,94,848.
The Fed is widely expected to keep interest rates unchanged, although traders will look for clues regarding a possible rate hike in December.
Inflation remains a concern, with CPI and PPI data coming in hotter than expected. US annual CPI inflation stood at 3.7% in September, driven largely by rising energy prices, while core inflation reached 2.6%, up 0.3 percentage points from August and still above the Fed’s 2% target.
Meanwhile, the US housing market remains under pressure from mortgage rates above 7%, while the labour market shows a low-hire, low-fire trend. Although layoffs remain near their lowest levels since the late 1960s, unemployed workers continue to face difficulties finding new jobs, CNBC reported.
This leaves the Fed facing a difficult policy choice. A hawkish message signaling the possibility of further rate hikes could put pressure on equities and cryptocurrencies. Conversely, a dovish tone could support a market rally but potentially raise concerns about persistent inflation.
The US dollar’s direction will also depend on Fed Chair Kevin Warsh’s comments. A stronger dollar could weigh on gold and silver prices, while a weaker dollar could support the precious metals.
Higher interest rates can also put pressure on equities and add to challenges for the AI trade, as major US technology companies have announced massive spending plans to build AI infrastructure, potentially making them more vulnerable to elevated borrowing costs.
The Fed is scheduled to announce its policy decision at 11:30 PM IST on Wednesday. Investors are also awaiting US personal consumption expenditures (PCE) inflation data, due on Thursday.
The PCE price index is a key inflation gauge closely monitored by the Fed as it seeks to bring inflation back to its 2% target. Analysts lowered their 2026 gold price forecast for a second consecutive quarter, citing high US Treasury yields, a strong dollar and expectations that interest rates will remain elevated for longer.
However, they still expect prices to recover in 2027, according to a Reuters survey.
Analysts and traders also lowered their 2026 price forecasts for platinum and palladium for a third consecutive quarter, the Reuters survey showed.
The Fed’s latest policy meeting concludes less than a week before the US midterm elections, with the cost of living and affordability among the key concerns for voters. Consumers have grown increasingly pessimistic about an economy facing higher prices for petrol, groceries, clothing, and other essentials.
At its September meeting, the US Federal Reserve raised its benchmark interest rate by 25 basis points, marking its first-rate hike since July 2023. The move took the federal funds target range to 3.75%–4%, as policymakers sought to address persistently elevated inflation.
The meeting minutes showed that officials viewed economic activity as expanding at a solid pace. They also noted that domestic spending remained resilient, productivity growth was strong, capital investment was robust, and the labour market remained relatively stable.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends.
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