Gold Closes at $4,039.375 an Ounce Ahead of Fed Decision as Inflation in Focus

Key Facts

Gold prices in EL7’s XAUUSD series closed at $4,039.375 an ounce on October 28, 2026, as the Federal Reserve’s October 27–28 meeting was under way. The metal had reached $4,060.33 on October 27, up from $4,017.19 on October 26, according to EL7 data. The Fed’s decision was due at a time when markets were no longer pricing in a strong chance of a rate hike at the October meeting. A Reuters report carried by Investing.com put the probability of rates remaining unchanged at about 90%. The report said, "There is about a 90% chance that the Fed will leave rates unchanged." The committee’s press conference was scheduled for October 28, while the Fed set its next meeting for December 8 and 9.

Rate-hike estimates ahead of the meeting reflected a clear shift over the month. The World Gold Council said on October 26 that markets were pricing in less than a 10% chance of a hike, compared with about 70% a month earlier. The council said, "Markets assign less than a 10% chance to another rate hike, down from about 70% a month ago." That was consistent with the Associated Press’s pre-meeting expectation that the Fed would leave rates unchanged, despite accelerating inflation linked to rising oil and gas prices. The agency reported that investors saw virtually no chance of a rate increase, which it described as being at about 3.9%. On September 16, the Federal Reserve had raised its target range by a quarter of a percentage point to 3.75%–4.00%. The decision was approved unanimously, with 12 votes in favor and zero against, according to the official statement.

Inflation and energy remained part of the monetary policy picture after the U.S. consumer price index rose 0.6% in September, compared with a 0.4% increase in August, taking its annual increase to 3.7% in the 12 months through September. The gasoline index jumped 9.1% during the month, according to the U.S. Bureau of Labor Statistics. By contrast, the index excluding food and energy rose 0.3% in September and 2.6% year over year. The World Gold Council said Middle East tensions pushed oil to a six-month high, while U.S. Treasury yields fell sharply and the dollar weakened in the week before its report. The Associated Press linked investors’ expectations for the Fed’s next move to remarks by its chair, Kevin Warsh, saying that his comments about returning inflation to the 2% target more quickly could be read as a signal of a possible rate hike at the December meeting.

Gold’s performance in September provides further context for current volatility. It ended the month at $4,176 an ounce, down 8.5% month over month, according to the World Gold Council. In the same month, the 10-year U.S. Treasury yield rose 53 basis points to 5.3%, and the dollar index gained 2%. The council partly attributed gold’s decline to higher yields, a stronger dollar and a reduction in futures positions. Fund flows, however, moved in a different direction: global gold funds recorded inflows of $10 billion, equivalent to 67 tonnes, during September. By contrast, managed-money net positions on COMEX fell by the equivalent of $12 billion, or 84 tonnes. The figures show that fund flows and futures positions moved differently during the same month.

Official demand for gold added another data point in September, when the People’s Bank of China added 23 tonnes to its reserves, its largest monthly increase since October 2023, according to the World Gold Council. That brought the bank’s purchases in the third quarter to 63 tonnes. The next U.S. data the council cited was the September personal consumption expenditures report, with annual inflation by that measure expected to accelerate to 3.6%. The council also expected GDP growth to rise from 2.2% in the second quarter to 3.2% in the third quarter, with both reports due Thursday, October 29. The Associated Press said another estimate put third-quarter growth at 3%, with the report expected on Thursday. The October consumer price index is scheduled for release on November 10 at 8:30 a.m. Eastern time, according to the Bureau of Labor Statistics calendar.