Gold fell 3% last week to $3,875, its lowest close since October 2025, after strong US GDP and sticky PCE inflation pushed markets to price a December Fed hike. Silver dropped 8.8% to $49.13, breaking below $50. A deepening sell-off in technology stocks left investors selling metals to cover losses elsewhere, and large gold and silver miners dropped as much as 8%. Rising Brent, driven by Gulf tanker attacks, fed rate fears rather than safe-haven demand, while a tech sell-off forced metal liquidation. ETF outflows picked up, but central bank buying remains steady. With Dhanteras on November 6, lower prices could revive Indian demand. Gold support sits at $3,860; bullish confirmation needs a close above $4,000.

MACRO BACKDROP & FED POLICY – THE FED HELD, BUT THE DATA DID THE DAMAGE

Wednesday’s FOMC meeting left rates unchanged at 3.75%–4%, though the 10–2 vote showed a split: Governor Lisa Cook and Cleveland Fed President Beth Hammack both wanted a quarter-point hike. Chair Kevin Warsh offered no clear steer on December. Gold dipped briefly to about $4,034 on the decision and had recovered by the evening.

Thursday was a different story. The BEA’s advance estimate showed Q3 GDP growing at 3.4% annualised, up from 2.2% in Q2. September PCE inflation came in at 0.5% for the month and 3.6% for the year, with core PCE at 3.1%. Strong growth paired with sticky inflation is about the worst combination for a metal that pays no interest. Markets are now pricing another 25 bp hike in December, following September’s move, which was the first hike since 2023. By Friday, the US 10-year yield was sitting near 4.93%.

GEOPOLITICAL TENSIONS – OIL UP, GOLD DOWN

The US-Israel war with Iran is now in its eighth month, and October was the worst month yet for Gulf shipping, with at least 35 attacks on UKMTO’s count. On Thursday, Iranian fast boats set off limpet mines on the tanker Louise 1, and on Friday another tanker was struck by explosive devices. Brent settled at $117.64, a six-month high, after gaining 13.6% over October.

In normal times, headlines like these would lift gold. This time, the higher oil price fed straight into inflation expectations and Fed hike bets, so the war premium landed in crude and bond yields instead of bullion. Traders are also preparing for possible US escalation after the November 3 midterms.

INVESTMENT AND RETAIL DEMAND

ETF selling gathered pace. Gold ETFs recorded net outflows of $1.21 billion in the week to October 23, breaking a 13-week run of inflows. SPDR Gold Shares (GLD) holdings fell 14.26 tonnes to 1,043.36 tonnes as of October 28, and the fund lost about $1.4 billion over October, though some of that money simply moved into cheaper funds such as GLDM and IAUM. CFTC data showed money managers trimming net longs to 104,206 contracts as of October 20.

Some perspective helps here. Q3 was a record quarter for gold ETFs, with $31 billion of inflows and holdings up 211 tonnes. What we’re seeing now is profit-taking from a high base. Official buying hasn’t wavered. World Gold Council data shows central banks reported 39 tonnes of net purchases in August, bringing the 2026 total to about 170 tonnes. The People’s Bank of China added 21 tonnes in September, its biggest monthly purchase in three years, and Poland had bought 98 tonnes by August. Central banks tend to buy into weakness rather than chase rallies, so their demand usually slows a decline. It rarely stops one within a week.

Dhanteras falls on November 6, and the price drop has come at a good moment for buyers. Indian dealers went from offering discounts of up to $6 an ounce to charging premiums of up to $7 in mid-October, the first premium in more than three months. The WGC also noted that the domestic discount to import parity narrowed from a September average of $66 to $8 in October.

Jewellers say footfall has improved, but investors are waiting for prices to settle before committing. Supply is tight too: September gold imports fell to $1.8 billion from $9.6 billion a year earlier. If MCX gold holds near ₹1,38,000, we expect coin and lightweight jewellery buying to pick up through Dhanteras and into the wedding season.

WEEK AHEAD

It’s a busy week: the US midterms on November 3, then October non-farm payrolls and Dhanteras, both on November 6. A strong jobs print would firm up December hike bets and keep metals under pressure. Any post-election escalation in the Gulf could push oil higher still, and for now that hurts gold more through rate expectations than it helps through safe-haven demand.

TECHNICAL OUTLOOK

  • Gold: support at $3,860, then $3,800; resistance at $4,000 and $4,080. A break below roughly $3,860 could trigger another leg lower.
  • MCX Gold: support at ₹1,37,500 and ₹1,35,800; resistance at ₹1,41,000 and ₹1,44,300.
  • Silver: support at $48.80, then $47.00; resistance at $52.00 and $54.70.
  • MCX Silver: support at ₹1,76,000 and ₹1,72,000; resistance at ₹1,86,000 and ₹1,97,400

Dr. Renisha Chainani, Chief Research Officer (CRO),Augmont