The Federal Open Market Committee kept the federal funds rate unchanged at 3.75%–4% on October 28. Souvik Biswas said the decision was generally expected. While international gold prices face pressure from high rates, a weak rupee might support domestic costs. Experts suggest investors watch global inflation and currency trends closely.

The Federal Open Market Committee (FOMC) kept the target range for the federal funds rate unchanged at 3.75%–4% on October 28, after a 25-basis-point rate hike in September.

The US Fed’s decision could influence gold prices in India, as gold is a non-interest-bearing asset and tends to face pressure when interest rates, the US dollar, and bond yields rise.

What does the Fed’s interest rate decision mean for gold prices in India? What is the outlook for the coming months, and how should investors and jewellery buyers approach gold purchases this festive season? Here is what experts suggest.

How could US Fed interest rates affect gold prices in India?

Souvik Biswas, Head of Research at Bajaj Capital, said the Fed's decision to keep rates unchanged was generally expected. Inflation remains elevated and persistent in the US, and the Fed may continue tightening monetary policy despite the potential impact on economic growth.

In India, currency movements could partly offset weakness in international gold prices. Biswas said the rupee could remain under pressure against the US dollar despite administrative measures and RBI intervention. A weaker rupee could support domestic gold prices even if international prices remain flat or decline slightly.

Vedika Narvekar, Research Analyst – Commodities & Currencies at Anand Rathi Shares & Stock Brokers, said markets are already pricing in the possibility of another rate hike in December. Expectations of tighter monetary policy could strengthen the US dollar and push bond yields higher, weighing on gold prices in the short term.

However, the longer-term outlook will depend partly on geopolitical developments and their impact on oil prices and inflation. If oil prices stabilise, the rate-hiking cycle ends and concerns about currency debasement return, gold prices could gradually recover, she added.

What is the gold price outlook in India?

Narvekar shared the following price outlook for gold on the Multi Commodity Exchange (MCX) at the current price of ₹1,43,360:

November 2026: Downward bias, with a broader range of ₹1,34,500– ₹1,48,000 per 10 grams.

December 2026: Range-bound movement with a slight recovery, with prices expected to trade between ₹1,40,000 and ₹1,53,000 per 10 grams.

End of 2027: Upward bias, with expected levels of ₹1,75,000– ₹1,78,000 per 10 grams.

Dr Vikas Gupta, CEO and Chief Investment Strategist at OmniScience Capital, said the Fed appears determined to control inflation and could raise interest rates further if required.

Higher US interest rates generally support the dollar and could keep international gold prices flat or lower. However, if the rupee depreciates against the dollar and the RBI does not raise interest rates correspondingly, domestic gold prices could see a mild increase. Festive and wedding-season demand could also support a slight increase in gold prices over the next few months, Gupta added.

Biswas said gold prices could remain flat until the US midterm elections in November, barring any institutional disruptions. However, he expects gold to deliver low double-digit positive returns in calendar year 2027.

What should gold investors do now?

In the near term, expectations of higher interest rates, a stronger dollar and elevated bond yields could keep gold prices under pressure. However, the correction could be cushioned by persistent geopolitical uncertainty, rising US debt and continued central bank purchases, Narvekar said.

Sanjiv Bajaj, Joint Chairman and MD at Bajaj Capital, advised investors to first assess their existing gold holdings, including jewellery, coins, gold exchange-traded funds (ETFs) and other gold investments, and evaluate how these fit into their overall portfolios.

“For many investors, an allocation of around 5–10 per cent may be reasonable,” he said.

Investors who already have substantial exposure to gold may have little reason to add more at current levels, while those with limited exposure could consider investing gradually rather than committing a large sum at once, Bajaj added.

Gupta said investors should consider increasing their gold allocation only if inflation rises sharply.

What should jewellery buyers watch out for this festive season?

If the purchase is planned and fits comfortably within your budget. There is no strong reason to keep waiting for a correction. Prices can move in either direction, and timing them perfectly is difficult for anyone, Bajaj said.

For larger purchases, buying in smaller amounts over time could help spread the impact of price fluctuations, he added.