Our gold forecast for 26-30 Oct 2026 starts with spot gold just below $4,000 an ounce after a drop of more than 4% last week, its steepest weekly fall since June according to Reuters. A jump in oil prices on Middle East supply fears revived inflation worries and lifted bets on another Federal Reserve rate hike, which weighs on gold because it pays no interest. The Fed decision on Wednesday 28 October and US PCE inflation data on Thursday 29 October are this week's main tests for XAU/USD.
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Key takeaways
- Spot gold fell 4.12% last week and traded at $3,995.81 late on Friday 23 October.
- Brent crude rose 6.2% last week to its highest weekly close since mid-2022, Investing.com reported, after Houthi attacks in Saudi Arabia.
- CME FedWatch showed an 81% chance of a Fed rate hike by December on Friday 23 October, Reuters reported.
- The Fed announces its decision at 18:00 UTC on Wednesday 28 October, and US Q3 GDP and September PCE data follow at 12:30 UTC on Thursday 29 October.
Gold price today: where things stand
As of 02:40 UTC on Monday 26 October, spot gold traded at $3,995.42 an ounce, Investing.com reported, almost unchanged from its late Friday price of $3,995.81.
Last week, spot gold opened at $4,164.69 on Sunday evening and set its weekly high of $4,190.17 early on Monday 19 October, according to Kitco. It then slid to a weekly low of $3,975.10 on Friday 23 October, its lowest level since early June, and ended the week down 4.12%. You can follow XAU/USD alongside the other gold CFDs available on Kudo.
What moved gold last week
Oil jumped on Middle East supply fears
The biggest influence on gold was oil. Brent crude rose 6.2% over the week to its highest weekly close since mid-2022, Investing.com reported, having approached $118 a barrel during the week. Reuters linked the move to Houthi attacks in Saudi Arabia. Kitco also counted 28 confirmed and reported incidents in and around the Strait of Hormuz in October alone.
Normally, conflict supports gold as a safe haven. This time, higher oil fed inflation fears instead. "The rise in oil prices could result in real interest rates remaining higher for longer, which would reduce the relative attractiveness of investing in and holding gold," said Hamad Hussain of Capital Economics, quoted by Reuters.
Fed rate hike bets firmed as inflation pressure built
The Bureau of Labor Statistics reported on 14 October that US consumer prices rose 0.6% in September and 3.7% from a year earlier, driven by a 20.4% annual jump in energy prices. The Fed had already raised its target range to 3.75% to 4.00% on 16 September.
Friday's data added to the pressure. The University of Michigan said year-ahead inflation expectations rose to 4.7% in October, the highest since May. By Friday, CME FedWatch showed an 81% chance of a hike by December, according to Reuters. Higher rates raise the opportunity cost of holding gold, which earns no yield.
Fund selling and margin calls deepened the drop
Selling by trend-following funds added to the decline. Ryan McKay of TD Securities told FXStreet that "heavy CTA selling this week" weighed on gold. CTAs, or commodity trading advisers, are funds that follow price trends systematically. A sharp technology-led stock sell-off on Thursday 22 October triggered further liquidations, and Rich Checkan of Asset Strategies International said margin calls drove part of the selling. A margin call is a demand for extra funds when losses on a leveraged position grow, a process explained in our guide to leverage and margin.
Gold forecast: what could move price this week
This is a heavy week for central banks and US data, so check the times in our economic calendar:
- Tue 27 Oct, 12:30 UTC: US durable goods orders, September (Census Bureau)
- Tue 27 Oct, 14:00 UTC: US new home sales, September (Census Bureau)
- Wed 28 Oct, 13:45 UTC: Bank of Canada rate decision
- Wed 28 Oct, 18:00 UTC: Fed rate decision (CME FedWatch about 91% hold, current range 3.75% to 4.00%)
- Thu 29 Oct, 12:30 UTC: US Q3 GDP, advance estimate (previous 2.2% annualised)
- Thu 29 Oct, 12:30 UTC: US PCE price index, September (previous 3.4% year on year, core 3.0%)
- Thu 29 Oct, 12:30 UTC: US initial jobless claims (previous 194,000)
- Thu 29 Oct, 13:15 UTC: ECB rate decision, followed by a press conference
- Fri 30 Oct: Bank of Japan decision at the end of its 29-30 October meeting
Fed decision on Wednesday 28 October
Markets expect the Fed to hold, with CME FedWatch pricing a 90.6% chance of no change according to FXStreet. The focus is on December. TD Securities said "a hold in October will make a December hike all the more likely." A statement that keeps the door open to a hike could push yields and the dollar higher, which tends to weigh on gold. Any sign that officials see oil-driven inflation as temporary could ease hike bets and support gold.
US PCE inflation and GDP on Thursday 29 October
The PCE price index is the Fed's preferred inflation gauge. According to the Bureau of Economic Analysis, headline PCE inflation was 3.4% and core PCE 3.0% in August. A September reading above those levels would reinforce hike expectations, while a softer figure could reduce December rate hike expectations, which would be supportive for gold. Strong Q3 GDP growth, released at the same time, could also support the case for tighter policy.
Other risks to watch
The Iran conflict remains the main unscheduled risk. Kitco reported that Washington and Israel could consider further strikes after the US midterm elections on 3 November, though no new operation has been confirmed. FXStreet, citing Al Jazeera, reported that President Trump ruled out immediate military action on Monday 26 October. On the demand side, TD Securities pointed to "strong physical demand from ETFs and central banks." Earnings from Amazon, Alphabet and Microsoft could also move wider risk appetite.
Bullish and bearish scenarios
Bullish case for gold
If the Fed signals it is in no hurry to hike again in December, or if September PCE inflation cools, Treasury yields and the dollar could ease and gold could recover. A diplomatic breakthrough that pulls oil prices lower could also reduce inflation fears and the pressure on rates. Continued buying from central banks and ETFs, flagged by TD Securities, could add support.
Bearish case for gold
If the Fed keeps a December hike firmly on the table, or if PCE inflation comes in hot, rate expectations could rise further and weigh on gold. A fresh escalation around the Strait of Hormuz that lifts oil again could repeat last week's pattern, feeding inflation fears rather than safe-haven demand. More systematic fund selling could extend the decline.
Gold FAQ
Why is gold going down?
Gold fell 4.12% last week, mainly because higher oil prices fuelled inflation fears and raised the chance of another Fed rate hike. Higher rates make non-yielding gold less attractive. Selling by trend-following funds and margin-related liquidations added to the drop, according to TD Securities and Asset Strategies International.
Will the Fed decision affect gold prices this week?
Very likely. The Fed announces its decision at 18:00 UTC on Wednesday 28 October. Markets expect rates to stay at 3.75% to 4.00%, so the guidance on a possible December hike matters most. A hawkish message could pressure gold, while a softer tone could ease rate expectations and support prices.
Does a higher oil price help or hurt gold?
It depends on the reason for the rise. Last week, higher oil hurt gold because markets saw it as an inflation risk that could keep interest rates higher for longer. Hamad Hussain of Capital Economics said this would reduce gold's relative attractiveness. In other periods, conflict-driven oil spikes have boosted gold's safe-haven appeal.
What is the long-term gold forecast?
Some forecasters remain positive on the longer term. Metals Focus, in a forecast published on 19 October and reported by Investing.com, expects gold to average $5,330 an ounce in 2027, citing rising public debt and reserve diversification. It also warned that high bond yields and inflation are limiting investment flows in the near term.
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Disclaimer: This article is for informational purposes only and reflects the views of the Kudo Research Team. It does not constitute financial, investment, legal or professional advice. Readers should seek independent advice before acting on the information. Kudo makes no warranties about the accuracy or completeness of the content and assumes no liability for any losses. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.