- Gold futures remain steady in a tight range near key levels as markets remain sidelined ahead of the key Fed decision tonight.
- Weaker dollar and geopolitical risks keep the broader bullish momentum for gold intact.
- Moving into 2026, the gold prices could face a significant downturn if Trump’s stimulus triggers growth in the US economy.
Gold futures (GC) hold steady on Wednesday as traders refrain from significant directional bets ahead of a highly anticipated Fed rate decision, keeping prices in a tight range. The markets stay dominated by the 2026 Fed rate cut trajectory, refraining from committing to fresh exposure.
The broader sentiment remains favorable for the gold bulls while the US dollar remains soft near multi-week lows as the Treasury yields struggled to post a meaningful recovery despite firmer economic data. Last week’s PCE inflation report came above the Fed’s target, but was not solid enough to alter the rate cut expectations, nor did it significantly change the medium-term outlook for further easing in 2026.
Labor market data added further to the gradual cooling narrative. Tuesday’s JOLTs report rose to 7.658 million in September and 7.67 million in October, signaling stabilization in labor demand but enough to shift Fed easing expectations. Fed officials have consistently stressed that easing labor market conditions and softer growth should help inflation to gradually drift to 2%. This reinforces the view that the central bank would be comfortable for further easing in 2026.
Meanwhile, safe-haven demand for gold acts as a secondary variable but provides consistent support to the precious metal. Especially, the renewed Russia-Ukraine conflict keeps global markets defensive, pushing passive flows into gold.
On the other hand, a broader, strategic shift is emerging as market participants evaluate gold’s long-term trajectory. The World Gold Council’s outlook report for 2026 presents four different scenarios, from a substantial rally to a significant correction. After a yearly gain of 61% and posting more than fifty all-time highs, the markets are questioning the sustainability of gold’s upside. The downside reflation scenario, linked with the Trump era’s fiscal stimulus, could strengthen the dollar, posing a downside risk to gold.
Until the Fed provides clarity, gold futures remain in consolidation, with market direction likely to be dictated almost entirely by Powell’s tone and updates to the economic projections.
