September inflation beat forecasts on both sides of the pipeline
Warsh refuses to prejudge the October meeting
Chair Kevin Warsh, speaking Friday alongside IMF Managing Director Kristalina Georgieva at the IMF-World Bank annual meetings in Bangkok, said the economy has largely behaved as expected since September's hike and declined to signal what the FOMC will do next. "I don't prejudge meetings," he said, adding that he does not believe in saying now what he might do at the meetings remaining this year, Reuters and MarketWatch reported. He tied part of the current inflation pressure to an AI-driven investment surge creating a near-term demand shock, and repeated his commitment to price stability.
December is now the market's base case
Fed funds futures put the odds of an October hike near 28% and a December increase near 89%, CME FedWatch data showed, CNBC reported. A Reuters factbox of major brokerages put the same figures at about 27% and 89.5%. After Warsh spoke, October-hike bets were trimmed toward 15% from about 28% a day earlier, and Goldman Sachs said the FOMC "is set to pause in October" while still expecting a second and final hike in December. Prediction market Polymarket showed 27.5% for October and 78.5% for December.
Officials keep a hawkish tilt
Chicago Fed President Austan Goolsbee called this week's stronger-than-expected inflation data "discouraging," while Cleveland Fed President Beth Hammack said the Fed might need to hike more aggressively if the public's inflation expectations deteriorated notably, CNBC reported. The Fed raised rates 25 basis points to 3.75%-4.00% in September, its first hike since 2023, and the median projection then implied one more increase this year.
The rate headwind still outweighs safe-haven demand
Analysts at Bank of America argue gold is unlikely to bottom until inflation and geopolitical worries fade, the dollar stops appreciating and the Fed is out of its tightening cycle. Even with Middle East risk in the background, the pressure has shown up in oil — Brent above $106 — rather than in bullion, TradingNews noted. The metal remains about 25% below its January peak, with the dollar index near an 18-month high earlier in the week.
Central banks and ETF investors keep buying
World Gold Council data show central banks bought a net 289 tonnes in the second quarter, up 62% year over year, and China added 23 tonnes in September — its largest monthly purchase in nearly three years and a 23rd straight month of buying. Global gold ETFs took in a record $31 billion in the third quarter, including $11.7 billion, or 81.3 tonnes, into North American funds, Kitco reported, citing the WGC.
Jewellery counters feel the price
High prices are thinning out consumption. Global jewellery demand fell 18% in volume in 2025 to 1,542.3 tonnes even as its value hit a record $172 billion, and second-quarter 2026 jewellery demand of 278 tonnes was the weakest since the pandemic. In India, domestic gold averaged 151,346 rupees per 10 grams in September while international prices averaged $4,324.7 an ounce, down 8.8% from January, and Crisil expects Indian jewellery retail volumes to fall 13-15% in fiscal 2027 to a decade low, Moneycontrol reported.
Forecasts split between $4,000 and $5,000
Jefferies sees gold at $5,000 in 2027, lifted its 2029 forecast to $4,600 an ounce and calls the weakness a buying opportunity. Bank of America is more cautious, arguing prices struggle to hold above $4,000, while UBS expects a short-term dip toward $4,000 followed by a recovery to $4,600 by year-end. Near-term technicals put resistance at $4,185-$4,201 and support at $4,148 and $4,132, according to Kitco.
What to watch: data now, the Fed on October 27-28
The next real test is the FOMC meeting on October 27-28, with the statement due at 2 p.m. ET on October 28, ahead of the final scheduled decision of the year on December 9. Goldman Sachs expects a pause in October and a second, final hike in December. Until then, bullion looks range-bound: a softer dollar lifts it, a hotter inflation print pushes it back down.
