Market Watch: Fed Holds as Gold Finds Its Feet (29 October 2026)
By the numbers
$4,050 Gold after the Fed decision, up from a 3-month low | 3.75–4.00% Fed funds range, held on a 10–2 vote |
3.7% US inflation, year to September | 102.2 US dollar index before the decision |
The week in one paragraph: Gold started the week at its lowest level since July, then recovered as the Federal Reserve held rates on Wednesday. The vote was split: two policymakers wanted a rate rise straight away. With US inflation at 3.7% and oil still above $100 a barrel, markets now see a real chance of a December rate rise. Next week brings the US midterm elections, a Bank of England decision and the US jobs report, all within four days.
Gold
December gold futures opened Monday at about $4,012 an ounce, the lowest since 20 July. By then gold was down roughly 7% over the month. Over the next two days it recovered to around $4,058 by Tuesday's close, and it was trading just above $4,050 after the Fed's decision.
The main pressure on gold is interest rates. Gold pays no interest, so when markets expect higher rates and the 10-year US Treasury yield is close to 5%, holding gold costs more by comparison. Working the other way, tension around Gulf energy supplies has kept some safe-haven demand in place, and the price of oil feeds straight into inflation worries.
The US dollar
The US dollar index (DXY) was firm at around 102.2 before the Fed decision. A central bank that is openly discussing raising rates tends to support its currency. For UK readers, sterling slipped to about $1.32 in late September, its weakest level since June. Markets have since started pricing in Bank of England rate rises too, which is why next Thursday's decision matters for GBP/USD.
What's driving it
- The Fed: it held rates at 3.75%–4.00% on 28 October by 10 votes to 2. Lisa Cook and Beth Hammack voted for an immediate 0.25-point rise. Futures pricing for a December rise climbed as high as about 83% after the decision.
- Inflation: US consumer prices rose 3.7% in the year to September, and producer prices rose 6.3%.
- Energy: Brent crude near $114 and WTI near $100 keep inflation risks high.
- Data still to come: US Q3 GDP and core PCE inflation (the Fed's preferred measure) were due on Thursday 29 October, after this went to press.
Next week's calendar (UK time)
| Date | Event | Why it matters |
|---|---|---|
| Tue 3 Nov | US midterm elections | Control of Congress shapes spending plans, which feed into Treasury yields and the dollar |
| Thu 5 Nov, 12:00 | Bank of England rate decision and minutes | Markets see a chance of the first rise in this cycle; a big driver for sterling |
| Fri 6 Nov, 13:30 | US jobs report (October) | A strong report would add weight to a December Fed rise |
Off the chart
Fed Chair Kevin Warsh outlined a plan to cut the number of rate-setting meetings from eight a year to six from 2028. Fewer meetings would mean fewer scheduled moments for markets to react to, but each one would likely carry more weight.
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- Yahoo Finance: Gold opens at 3-month lows at the start of Fed week (26 Oct)
- Kitco: Gold climbs above $4,050 ahead of Fed decision (27 Oct)
- Yahoo Finance: Interest rates held steady in split vote (28 Oct)
- NAHB Eye on Housing: Fed holds rates, with two votes for another hike
- Mitrade: Fed holds rates with two hawkish dissents (28 Oct)
- Trading Economics: British pound news
- Bank of England: MPC dates for 2026
This report is general market information, not financial advice or a forecast. Trading leveraged products such as forex and CFDs carries a high risk of losing money. Past performance is not a reliable indicator of future results.