Gold prices remain flat after Fed holds interest rates steady; investors await US inflation data

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Gold prices surged near $4,076 in the early trade on October 29, but quickly trimmed some of those gains to trade just above $4,040 per ounce, down 0.67 percent over the past 24 hours, while US gold futures prices held steady at $4,052.10 per ounce at 03:27 GMT from their previous close.

The US Federal Reserve kept interest rates unchanged at 3.75 percent to 4 percent, offering some relief to the bullion following recent selling pressure.

Mirroring the international trend, domestic MCX gold futures for December 4 delivery remained flat, though it was trading 0.09 percent down to Rs 1,43,573 per 10 grams (09:04 IST). MCX spot gold closed the Wednesday (October 28) session at Rs 1,42,253 per 10 grams, while silver settled at Rs 1,93,477 per kilogram.

Fed rate decision and US inflation data to guide gold’s next move

The Federal Reserve held interest rates steady on Wednesday (Oct. 28), reducing the immediate risk of tighter US financial conditions. However, differences among policymakers over the rate outlook suggest that uncertainty surrounding the central bank's next move remains. Investors are also monitoring inflation data, the dollar, and Treasury yields for further clues on monetary policy direction and its implications for precious metals.

Vikram Subburaj, CEO of Giottus, said, "Gold and silver futures remain volatile in India as investors assess the impact of the Federal Reserve's latest policy decision and await fresh inflation data. Gold ended the previous session slightly lower, while silver recorded a marginal gain. However, neither metal has established a clear recovery trend."

For domestic investors, gold needs to hold above Rs 1,43,321 to avoid renewed downside pressure. A sustained move beyond Rs 1,44,343 would strengthen the recovery. Silver needs to defend Rs 1,94,000 per kg, while a move above Rs 1,96,550 would improve near-term momentum.

Subburaj added that the next major trigger for precious metals is the US Personal Consumption Expenditures (PCE) inflation data. Investors should monitor fresh MCX prices, the dollar and Treasury yields, while avoiding aggressive positions until the market establishes a clearer direction.

Nischal Shetty, founder of WazirX, said the Federal Reserve's decision to hold rates steady reduced the immediate risk of tighter US financial conditions. However, two policymakers favoured an increase, while Canada raised interest rates, highlighting the uneven direction of global monetary policy.

He noted that global markets reflected this selective positioning, with Treasury yields near 5 percent and Brent crude below $113 per barrel.

For gold, the Fed's decision to maintain rates provides some support by avoiding an immediate tightening of financial conditions. However, the metal's near-term direction will also depend on inflation readings, movements in the US dollar and Treasury yields, and expectations surrounding the central bank's future policy decisions. Investors will continue to assess these factors before establishing a clearer trend in precious metals.