Gold rises to $4,141.28 amid rate hike bets and inflation concerns
Key Facts
Spot gold rose 0.4% to $4,141.28 an ounce at the close of trading on Wednesday, October 21, according to Investing.com coverage, in a session that combined price gains with persistent pressure linked to inflation and the path of U.S. interest rates. Gold futures also rose, adding 0.2% to settle at $4,159.50 an ounce, according to the website. The gains came as Reuters linked pressure on the metal during Wednesday's session to rising oil prices amid Middle East tensions. The news agency said higher oil prices stoked inflation concerns, putting energy price developments at the heart of the factors influencing gold trading. Those concerns extended into a monetary policy backdrop of growing bets on a U.S. rate hike before year-end, with the Federal Reserve's October meeting approaching.
The price concerns follow an acceleration in annual U.S. inflation to 3.7% in September from 3.4% in August, according to U.S. Bureau of Labor Statistics data. The acceleration concerns consumer prices over the months ending in September, adding an actual increase in the annual inflation rate to the backdrop of the monetary policy debate. The Federal Reserve described inflation as "still elevated" in the statement accompanying its previous decision in September. That statement was approved unanimously by voting members, by 12–0, according to the statement published on the U.S. central bank's website. The Fed thus approaches its next meeting following a statement unanimously approved by voters and monthly data that subsequently showed consumer price inflation accelerating compared with August.
In interest rate markets, the probability of the Federal Reserve raising rates in December reached 88%, according to CME Group's interest rate expectations tool, in a reading reported by Reuters on October 21. That pricing relates to the December meeting, which follows the upcoming October meeting on the central bank's calendar. On officials' deliberations, the Associated Press cited minutes of the previous meeting as showing that most Fed officials expected another rate increase would probably be needed during the year. Kevin Warsh, meanwhile, said during an appearance in Bangkok: "I do not prejudge meetings," according to the news agency. Warsh's remarks came as the minutes indicated that most officials considered further tightening likely to be needed, keeping decisions at upcoming meetings central to tracking the course of monetary policy.
On the technical front, an analysis published by Sienna Vance on Investing.com on October 20 identified the $4,101–4,112 an ounce zone as the first test for buyers. The analysis tied the prospect of gold rebounding toward the $4,140–4,147 zone to buyers' ability to defend the test area, presenting a path conditional on it holding. In Tuesday's coverage, David Morrison, a market analyst at Trade Nation, said gold had broken the support level discussed in the article twice during the month. He added that the break was brief in both cases, recalling the price's recovery after previous breaks below support. In separate Reuters coverage dated October 20, Bob Haberkorn, a market strategist at StoneX, highlighted a lower level to watch to gauge the metal's resilience. He said: "The $4,000 level is important for gold and should be watched to see whether it holds."
The upcoming events begin with the Federal Reserve meeting on October 27 and 28, according to the official Federal Open Market Committee calendar. That is followed on October 29 by the release of the U.S. personal income and outlays report for September, according to the Bureau of Economic Analysis schedule. The bureau set 8:30 a.m. for the report's release, which comes after the Fed meeting concludes. At the same time, the bureau will publish the advance estimate of U.S. gross domestic product for the third quarter of 2026, adding a growth reading to the awaited income and spending data. After those events, the Federal Reserve will hold its scheduled December meeting on 8 and 9, according to its official calendar.