Gold Holds Steady Ahead of Fed Rate Decision; Outlook Key

Gold prices are practically flat today, but don’t let the stillness fool you. That happened. And then the entire market stopped to listen to what the US Federal Reserve is about to say.

Spot gold is holding near 4,209 an ounce. India’s December gold futures also closed slightly up yesterday at ₹1,30,160 per 10 grams (24-carat). The thing is, this is all just pre-Fed positioning.

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The Fed is The Only Story

The two-day US Federal Reserve meeting is wrapping up. Markets are basically banking on a rate cut—traders are assigning an 86.4 per cent probability to the target rate being cut by 25 bps (to the 350-375 bps target range).¹ That’s a near-certainty, or nothing.

• The Big Reveal: Fed Chair Jerome Powell is scheduled to announce the policy meeting outcome at around 00:30 a.m IST.

• Why It Matters: The rate cut itself is already priced in.² The kicker is the forward guidance. Jateen Trivedi of LKP Securities said the statement and the economic outlook will drive the fresh momentum. Gold tends to do well when rates fall because it makes non-yielding assets more attractive.³

The Outlook: Cautious Cut or Full Steam Ahead?

Manav Modi, Commodities Analyst at Motilal Oswal, noted that gold is currently trading slightly lower from recent highs because US bond yields ticked up after the Japan earthquake.

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The key market debate is about what Powell signals for 2026:

• Bullish Scenario: If Powell’s tone and forecasts build expectations for further rate cuts next year, that could push bullion prices significantly higher.⁴ Gold is expected to trade in the ₹1,28,000 to ₹1,31,500 range ahead of the announcement, according to analysts.

• Steady Scenario: If this meeting turns out like the last two—a “cautious cut” with no strong long-term easing signal—it could keep bullions mostly steady, or nothing. A potential new Fed chair candidate, Kevin Hassett, even said laying out a six-month rate cut plan would be “irresponsible,” which is adding to the caution.

Central banks are still buying aggressively, too.⁵ People’s Bank of China added to its gold reserves for the 13th straight month.⁶ That sustained demand is providing a solid floor for prices, regardless of the short-term Fed volatility.

Quick City Price Check (24K, Per 10 Grams)

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