Gold Falls 0.34% to $4,128/oz Amid Fed Rate Hike Speculation

Gold futures slipped 0.34% on Wednesday, closing at $4,128.50 per ounce – a $14.10 drop from the previous close. Silver, which is more sensitive to industrial demand, fell 0.52% to $57.70, down $0.30 from its prior close.

The 0.34% dip reflects rising expectations that the Federal Reserve will raise rates again in December, after holding rates steady at its October 27‑28 meeting. Vikas Gupta, CEO of Omniscience Capital, warned that higher yields will erode gold’s safe‑haven appeal, even as inflation pressures linger.

Geopolitical tensions, especially in the Middle East, keep a safety‑net in place for bullion. Vikram Kasat of PL Capital noted that Brent crude hovering around $108 per barrel still fuels inflation concerns, which in turn support the gold‑dollar link.

India’s festive calendar could cushion domestic prices. Rajeev Sharan of Brickwork Ratings said 24‑karat gold was hovering near ₹1.48 lakh per 10 grams on Dussehra, after a 6% slide from earlier record highs. Sharan estimates a 5% price band in the near term, driven by holiday buying.

Silver’s trajectory remains trickier because of its industrial use. Even if central banks continue buying, the metal may not sustain a rally without a broader uptick in manufacturing demand. Colin Shah, MD of Kama Jewelry, observed a shift to lighter jewellery and gold coins during the festive season, hinting at cost‑conscious buying.

Looking ahead, traders will keep a close eye on the Fed’s December policy decision and U.S. inflation data. A rate hike could keep gold and silver subdued, whereas strengthening Indian demand might offer a short‑term lift. The next major data releases are the U.S. PCE and India’s consumer price index, both slated for December.