Gold prices are expected to face significant pressure in the fourth quarter as hawkish US Federal Reserve policy and dollar strength create headwinds for the precious metal. According to BMI, a unit of Fitch Solutions, gold prices have probably peaked and will be under pressure in Q4 as the strength in the dollar meets a hawkish US Fed policy. The research agency expects the Fed to hold rates steady till the end of the year, with potential cuts of 50 basis points in 2027, which could place a firm floor under gold prices despite the current decline. Elara Capital expects gold to trade in the range of $4,200-4,700 per ounce for the rest of the calendar year, while Australia's Office of the Chief Economist forecasts prices to remain high in 2026 and 2027 before falling slowly to around $4,000 in 2031. Gold has shed all gains made this year, declining over 20% since it soared to a record high of $5,608 per ounce in January, as reported by The Hindu BusinessLine.
Gold prices fell over $50 to $4,305 per ounce on Wednesday, as reported by The Hindu BusinessLine, with December futures trading at $4,342. The latest decline comes as investors weighed the prospect of major central banks keeping interest rates elevated for longer in their efforts to curb persistent inflation. The precious metal had previously snapped its two-session winning streak and recovered to new highs, with spot gold having previously staged a 1.83% recovery to $4,340.77 following recent market volatility. The Federal Open Market Committee had voted unanimously (12-0) for a 25 basis points rate hike to 3.75%-4%, with Chair Kevin Warsh emphasizing that inflation has been too high for too long. According to The Times of India, gold has had a bit of a rollercoaster this past week, closing marginally higher at $4,378.63/oz on Friday, with prices staying choppy since then. Midweek, news of Saudi Arabia restoring a key pipeline sent gold spiking as much as 2.8% in a session, but that faded once Fed officials flagged that inflation is broader than just an oil problem.
The US dollar steadied near its strongest level in two months, making greenback-priced bullion more expensive for overseas buyers, according to The Hindu BusinessLine. A firmer dollar provides key headwinds for gold prices, as lower borrowing costs and a weaker greenback typically boost the appeal of the non-yielding precious metal. However, bullion's appeal tends to wane when elevated rates boost returns on interest-bearing investments, as while bullion is often seen as a safeguard against inflation, its appeal tends to wane when elevated rates boost returns on interest-bearing investments. Boston Federal Reserve President Susan Collins wrote in a LinkedIn post that she supported the US central bank's decision last week to raise interest rates in the face of risks that future inflation will be above the 2% target. The Fed had signalled another increase could come before year-end, with the Bank of Japan and European Central Bank also raising rates recently. According to The Times of India, the Fed's rate hike wasn't the real story, but it was oil that kept moving gold around, with fresh US-Iran diplomatic hopes knocking oil down over 10%, easing rate-hike worries almost as fast as they'd built up.
US President Donald Trump warned that he could annihilate Iran if there is no deal to end the war, but also suggested an agreement could come soon amid a diplomatic push at the United Nations, as reported by The Hindu BusinessLine. This represents a significant development from previous geopolitical tensions that had supported safe-haven demand for precious metals. Crude oil prices continue to trade above $100 per barrel, with Brent crude futures hovering around $101 and WTI crude trading above $92, creating additional headwinds for gold according to ET Now. Inflation worries intensified due to rising crude oil prices, with crude continuing to trade above the critical $100 threshold that had previously supported gold prices. Midweek, news of Saudi Arabia restoring a key pipeline sent gold spiking as much as 2.8% in a session, but that faded once Fed officials flagged that inflation is broader than just an oil problem, as reported by The Times of India. Short-term volatility in gold very much depends on how oil trades and the developments that happen in the Middle East, according to Kyle Rodda, senior financial market analyst at Capital.com, while noting that long-term structural drivers for gold are still really strong.
Global gold ETFs have now seen inflows for nine straight weeks, with $4.24 billion coming in during the week to September 18 alone, over half from the US, according to The Times of India. This represents a genuinely strong story in demand fundamentals despite price volatility. China's demand is even more striking with imports through August already crossing 1,000 tons, beating all of 2025 in eight months, aided by cheaper prices earlier this year and a firmer yuan. The PBOC bought the most gold since 2023, extending its buying streak to nearly two years, demonstrating continued institutional support. In the domestic market, gold and silver futures settled on the Multi Commodity Exchange (MCX) at ₹153,989 per 10 grams and ₹239,455 per kg, respectively, as reported by ET Now. October gold futures had previously risen ₹1,597, or 1.04%, last week to ₹1.54 lakh per 10 grams on MCX, while silver futures gained nearly 3% to ₹2.41 lakh per kg. Among other metals, spot silver fell 0.4% to $66.78 per ounce, platinum lost 0.8% to $1,818.21 and palladium declined 0.4% at $1,302.61.
Gold prices are likely to be choppy as safe haven demand and rising interest rates put opposing pressures, says Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, as reported by The Times of India. Gold has settled into a $4,340-4,360 range, with support at $4,320/$4,230 and resistance at $4,420/$4,510. In the domestic market, support levels are at ₹1,51,900/₹1,48,800 with resistance at ₹1,55,500/₹1,57,500. Technical analysis shows support at $65.50/$63.20 and resistance at $68.70/$70.50, while domestic support stands at ₹2,37,250/₹2,28,500 with resistance at ₹2,48,500/₹2,54,000. The benchmark two-year Treasury yield has risen sharply in recent sessions, with markets reassessing the path of US monetary policy following the Federal Reserve's latest guidance. Despite elevated US Treasury yields and potential rate hike cycles from both the Fed and BoE, gold prices continue to find support from inflationary pressure and US fiscal concerns. Gold is currently going through a phase of consolidation and trading with a bullish bias, according to industry experts, with near-term strength viewed as the market having fully priced in negative news.
