Gold prices held steady, while silver prices experienced a decline on Wednesday, as investors looked ahead to next week’s Federal Reserve policy decision for new insights on the direction of US interest rates. In the domestic market, MCX silver futures for December 2026 delivery decreased by Rs 1,144, settling at Rs 2,10,341 per kg. Gold futures for December 2026 delivery decreased by Rs 171, settling at Rs 1,48,858 per 10 grams. Spot gold declined by 0.1% to $4,118.64 per ounce, whereas US gold futures for December delivery also decreased by 0.1%, settling at $4,137.60.
The US Federal Reserve is expected to forgo an increase in interest rates this month, with a potential hike anticipated at the next meeting in December, as indicated by a consensus among economists. This decision reflects policymakers’ inclination toward patience, despite persistent inflation that suggests a need for a more stringent approach. According to CME’s FedWatch Tool, traders are assigning an 84% probability that the American central bank will maintain current interest rates during its forthcoming meeting from October 27 to October 28, while the likelihood of a rate increase in December stands at 90%. This occurs in the context of a worldwide cycle of interest rate increases.
Higher interest rates generally influence gold prices by raising the opportunity cost associated with holding bullion, which yields no interest. The US Federal Reserve increased its benchmark overnight interest rates by 25 basis points, bringing it to the 3.75-4.00% range during its most recent meeting in September. The 4,200 mark continues to act as a key resistance, while a stronger Dollar Index near 101.95 is limiting upside, said Jateen Trivedi. Moving forward, market participants will concentrate on the Federal Reserve’s rate decision at the end of October and the accompanying policy guidance for insights into bullion trends.
Prices are expected to exhibit volatility in the lead-up to the announcement, according to the analyst. Gold prices may sustain a range of $4,200-5,000 per ounce in the coming one to two years, propelled by central bank acquisitions and robust demand from Asian investors, which could diminish the impact of US interest rate fluctuations, as noted in a report by NDB Wealth Management. “Gold has ceased to be influenced by the Fed,” the report stated.
