Gold prices hover near $4,040 as Fed holds rates steady, investors await US inflation data

Gold prices fell back to around $4,040 per ounce after briefly touching $4,076 in early trade on Oct. 29, marking a 0.67% decline over the previous 24 hours. US gold futures were steady at $4,052.10 per ounce as of 03:27 GMT. The Federal Reserve left its benchmark rate unchanged at 3.75%-4%, easing concerns of tighter financial conditions.

In India, MCX gold futures for December delivery were flat, trading 0.09% lower at Rs 1,43,573 per 10 grams, while spot gold closed at Rs 1,42,253 per 10 grams. Silver settled at Rs 1,93,477 per kilogram.

"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," said Vikram Subburaj, CEO of Giottus. He added that gold needs to stay above Rs 1,43,321 to avoid further downside, and a sustained rise above Rs 1,44,343 would support a recovery. For silver, defending Rs 1,94,000 per kilogram is crucial, with a move above Rs 1,96,550 seen as positive.

Subburaj identified the upcoming US Personal Consumption Expenditures (PCE) inflation report as the next major catalyst for precious metals, urging investors to watch MCX prices, the dollar, and Treasury yields before taking aggressive positions.

"The Federal Reserve's decision to hold rates steady reduced the immediate risk of tighter US financial conditions," noted Nischal Shetty, founder of WazirX. He highlighted that two Fed policymakers favored a rate increase and that Canada raised its rates, creating a mixed global monetary-policy backdrop. He observed Treasury yields near 5% and Brent crude below $113 per barrel.

Analysts said the metal's short-term path will depend on US inflation readings, dollar movements, Treasury yields, and expectations about future Fed policy, with market direction remaining uncertain pending the data release.