Gold prices rose slightly on Tuesday, with spot gold reaching $4,145.22 per ounce and US December gold futures at $4,164.70, supported by a weaker US dollar. This comes as investors anticipate the US Federal Reserve's policy meeting scheduled for October 27–28, which will provide signals on the future path of interest rates. The yellow metal has corrected over 26% from its record highs in January 2026, prompting Indian buyers to reassess their purchasing strategies ahead of the festive season, according to livemint.com.
The recovery in gold prices followed a period of decline influenced by expectations around US interest rate decisions. The CME FedWatch Tool indicated an 82% probability that the Federal Reserve would keep rates unchanged in October, though a rate hike in December remains likely at 89%. Higher interest rates typically pressure gold prices since bullion does not yield interest, increasing the opportunity cost of holding it. Meanwhile, a softer dollar makes gold more affordable for overseas buyers, including Indian households who are adjusting their demand by opting for lighter jewellery, coins, bars, and gold ETFs during Dussehra and Diwali, per livemint.com.
Gold remains a preferred investment and festive purchase in India, but elevated prices have altered buying patterns this season. The metal's price movements are closely linked to global inflation trends and geopolitical factors, such as energy prices and US-Iran tensions, which affect the Federal Reserve’s rate decisions. Despite recent volatility, gold has held above $4,100 an ounce in October, consolidating after a more than 6% decline in the previous month. The interplay between inflation, interest rates, and currency fluctuations continues to shape the outlook for gold demand in India and globally, as reported by livemint.com.
The Federal Reserve's upcoming policy meeting on October 27–28 will be closely watched for signals on interest rates, with traders pricing in a high likelihood of a December hike. Indian buyers are expected to continue balancing their gold purchases between jewellery and investment products during the ongoing festive and wedding seasons, reflecting the metal’s enduring appeal despite price corrections, according to livemint.com.