Gold and silver prices dipped on Wednesday, October 28, as investors awaited the US Federal Reserve’s policy decision. The Fed is widely expected to keep interest rates unchanged, but traders will be watching for any hints about a potential rate hike in December. MCX gold futures for December delivery fell 0.15%, or ₹213 per 10 grams, to ₹1,43,925, while silver futures declined nearly ₹2,000 per kilogram to ₹1,94,848.
The Fed faces a tough choice as inflation remains elevated. US annual CPI inflation stood at 3.7% in September, with core inflation at 2.6%, above the Fed’s 2% target. The housing market is under pressure from high mortgage rates, while the labor market shows a low-hire, low-fire trend. A hawkish stance could pressure equities and cryptocurrencies, while a dovish tone might raise concerns about persistent inflation.
The direction of the US dollar will also depend on Fed Chair Kevin Warsh’s comments. A stronger dollar could weigh on gold and silver prices, while a weaker dollar could support them. Higher interest rates could also challenge equities and the AI trade, as major tech companies face elevated borrowing costs.
Analysts have lowered their 2026 gold price forecast for a second consecutive quarter, citing high US Treasury yields and a strong dollar. However, they still expect prices to recover in 2027. The Fed’s policy meeting concludes less than a week before the US midterm elections, with affordability being a key concern for voters.