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Kevin Warsh Refuses to Signal October Federal Reserve Interest Rate Decision

Warsh reiterated that he does not believe in announcing policy decisions before Federal Reserve meetings, arguing that financial markets should assess incoming economic data rather than depend on advance guidance from policymakers.

“I don’t prejudge meetings. I don’t believe in saying now what I might do at the meetings that we have in the balance of this year,” Warsh said.

He acknowledged that his position could disappoint investors looking for clues ahead of the Fed’s next meeting later this month. However, he indicated that the central bank is taking a different approach to communicating its policy outlook.

“It’s a new chapter at the Fed [and] we’re not in that business anymore. But we can go in any direction you’d like,” he said.

His remarks leave investors without a clear indication of whether the Federal Reserve will raise interest rates, keep them unchanged or consider another policy adjustment at its upcoming meeting.

Global Central Banks Face Synchronous Monetary Tightening

Warsh also pointed to a broad shift towards tighter monetary policy across major economies, describing inflation control as a challenge shared by central banks worldwide.

Although individual central banks operate under different mandates and make independent policy decisions, their efforts to address rising prices are increasingly moving in the same direction.

Warsh described the trend as “a synchronous tightening in monetary policy in most places around the world,” adding that “there’s no free riders.”

The comments underline how inflation has become a shared concern for policymakers as higher energy costs, geopolitical tensions and strong investment demand put pressure on prices and borrowing costs.

The global economic outlook is also complicated by rising public debt. Global public debt is projected to exceed 100% of worldwide gross domestic product (GDP), a threshold last reached in the aftermath of World War II.

The United States government has argued that stronger economic growth would help manage its rising debt burden. However, the IMF has warned against relying on economic growth alone to resolve the country’s fiscal challenges.

Energy Costs and AI Investment Add to Global Inflation Pressures

Rising energy prices linked to the Iran war, combined with the investment boom in artificial intelligence, are adding to inflationary pressures and increasing borrowing costs across the global economy.

These developments present a challenge for central banks, which must control inflation without unnecessarily weakening economic growth. Higher interest rates can help contain price pressures, but they can also increase borrowing costs for households, businesses and governments.

The situation is particularly complicated by the growing burden of public debt. With global debt approaching levels not seen since the aftermath of World War II, policymakers face increasing pressure to maintain economic stability while managing financing costs.

The US government has maintained that strong economic growth can help reduce the strain of rising debt. However, the IMF has cautioned that growth alone may not be sufficient to address the country’s fiscal challenges.

Kevin Warsh Optimistic About AI but Warns of a Difficult Transition

Alongside his concerns about inflation and monetary policy, Warsh expressed optimism about the long-term economic potential of artificial intelligence.

He believes economies that successfully integrate AI could experience higher productivity and greater wealth creation. However, he cautioned that the transition may be uneven and that the technology’s near-term impact on employment remains uncertain.

“I want you to hear from me optimism, but optimism leavened by the seriousness of purpose,” Warsh said.

Warsh suggested that the significance of the current technological transformation would become clearer over time. He expects AI to have a lasting influence on the global economic landscape.

A decade from now, he said, people will look back on the developments and “say this was hugely consequential.”

His remarks highlight the balance between recognising AI’s potential to improve productivity and preparing for possible disruptions to employment and business activity. The pace at which companies adopt AI and translate technological advances into measurable productivity gains will remain an important factor in assessing its economic impact.

Stock Market Reaction to Kevin Warsh’s Remarks

Financial markets showed a relatively measured response following Warsh’s comments in Bangkok.

S&P 500 and Nasdaq futures edged higher after the speech, while Asian stock market indexes and US Treasury yields remained largely stable.

Warsh’s refusal to provide advance guidance meant investors received no fresh confirmation about the Federal Reserve’s next interest-rate move. Market participants will continue to assess economic releases, inflation trends and employment figures to determine the likely direction of US monetary policy.

The absence of a clear signal also reinforces the importance of upcoming economic data in shaping expectations for the remainder of the year.

Fed Rate Outlook: September Hike and October Meeting in Focus

The Federal Reserve raised its benchmark interest rate to a range of 3.75% to 4% last month, marking its first rate increase since 2023.

According to CME FedWatch data cited in the report, traders see a 72.3% probability that the Fed will leave interest rates unchanged at its October 27–28 meeting. Meanwhile, most market participants expect a 25-basis-point rate increase at the December meeting.

These expectations reflect continued uncertainty over inflation, energy prices, economic growth and the consequences of the global investment boom in AI.

However, market probabilities are not official Federal Reserve decisions and can change as new economic information becomes available.

Warsh’s latest remarks suggest that investors should not expect advance assurances about the Fed’s next move. Instead, the direction of monetary policy will depend on how economic conditions develop and how policymakers evaluate the balance between inflation risks and growth prospects.

What Lies Ahead for the Global Economy and Fed Policy?

Warsh’s comments highlight two major considerations for the economic outlook: the potential for AI-driven productivity growth and the continuing challenge of controlling inflation.

While stronger investment could support long-term growth, uncertainty over employment and the near-term effects of AI means the transition may be uneven. At the same time, persistent price pressures could complicate the Federal Reserve’s decisions on interest rates.

For now, Warsh has avoided signalling the outcome of the next policy meeting. Investors and businesses will be watching incoming economic data and further central bank commentary to assess the outlook for inflation, employment, economic growth and US monetary policy.

FAQ’s

1. What did Kevin Warsh say about AI’s impact on the global economy?

Warsh said AI could become one of the most consequential economic changes of his lifetime, potentially boosting productivity and wealth. However, he cautioned that the transition could be uneven and its near-term employment effects remain uncertain.

2. Why does Kevin Warsh believe AI could create uncertainty in the job market?

AI is expected to change how businesses operate and how demand and supply evolve. Warsh said its impact on employment over the next 12 to 18 months remains unclear as companies and workers adapt to the technology.

3. What concerns did Warsh highlight about inflation and global investment?

Warsh described the investment surge as a major positive development for the global economy but noted that rising prices remain a concern among central bankers. Policymakers must balance the benefits of economic growth with the need to maintain price stability.

4. Did Kevin Warsh indicate the Federal Reserve’s next interest-rate decision?

No. Warsh declined to prejudge upcoming policy meetings or announce his position in advance. He reiterated the Federal Reserve’s commitment to price stability but provided no clear signal about its next interest-rate decision.

5. How could artificial intelligence influence future monetary policy decisions?

AI could increase productivity and expand economic output over time, but its effects on employment, demand, supply and inflation remain uncertain. The Federal Reserve will need to assess these developments alongside economic growth and price data when making policy decisions.

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However, the minutes did not provide a clear indication of when policymakers would make their next move. Officials highlighted that persistently elevated prices and a relatively stable labor market could justify another increase in the federal funds rate.

The Federal Reserve is scheduled to announce its next interest rate decision on October 28, followed by another policy meeting on December 9.

Fed Officials Expect Another Rate Increase

According to the meeting minutes, a majority of policymakers believe another rate increase could be appropriate before the end of 2026.

“With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” the document stated.

At the same time, Fed officials stressed that future decisions will depend heavily on incoming economic data and changing risks.

“Participants emphasized, however, that they approached each meeting with an open mind and decisions at future meetings would depend on incoming information and its implications for the outlook and the balance of risks,” the minutes said.

October Rate Hike Looks Less Certain

Following the September 16 policy meeting, markets initially increased expectations that the Federal Reserve could raise interest rates again at its late-October meeting.

However, more recent inflation data and comments from several senior Fed officials have reduced expectations for an immediate October increase.

The Fed’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Price Index, showed core inflation at 3% in August, while headline inflation stood at 3.4%. Both measures remained well above the Fed’s 2% inflation target, although the readings came in below market expectations.

Fed Remains Concerned About Sticky Inflation

The September meeting discussion showed that policymakers continue to see risks that inflation could remain elevated for longer than expected.

At the same time, officials described the labor market as being “close to maximum employment”, while overall economic growth had strengthened.

The decision to increase the benchmark federal funds rate by 25 basis points was unanimous, despite earlier indications that some key policymakers had been hesitant to support another hike.

“Many participants emphasized that a higher path for the target range would be prudent on risk-management grounds, providing insurance against inflation remaining persistently above target due to stronger-than-expected demand or further adverse supply shocks,” the summary said.

Majority of Fed Officials See One More Hike

The latest projections from the Federal Open Market Committee point toward one additional rate increase this year, followed by no further hikes in 2027.

Of the 18 FOMC officials who submitted their forecasts, 16 expected another rate increase.

Fed Chairman Kevin Warsh has not submitted a forecast since taking the position in May. During his post-meeting news conference, Warsh described the rate increase as removing “a dose of accommodation” from monetary policy.

That comment prompted Wall Street analysts to consider whether additional rate increases could follow.

However, several other Fed officials have subsequently indicated that the central bank does not need to move quickly, while recent inflation data has shown some improvement despite a notable rise in short-term inflation expectations.

Inflation Expectations Remain Elevated

Market-based inflation indicators continue to point toward persistent price pressures.

A new survey released Wednesday by the Federal Reserve Bank of New York showed that consumers’ expectations for rising prices over the next year had climbed to their highest level since May 2023.

The development adds another layer of uncertainty for policymakers as they assess whether inflation is moving sustainably toward the Fed’s 2% target.

Treasury Yields Reach Highest Levels Since 2002

U.S. Treasury yields have also climbed sharply, reaching levels not seen since 2002.

Fed officials discussed the rise in Treasury yields during their meeting and attributed the move to expectations of higher Federal Reserve rates, strong economic growth and continued investment related to artificial intelligence.

Staff economists also suggested that some of the increase could be linked to “uncertainty related to the U.S. Treasury’s announcement and implementation of the buyback program.“

U.S. Treasury Secretary Scott Bessent announced in August that the department would increase its buybacks of previously issued long-term debt.

However, the program has so far had limited influence on Treasury yields, which remain close to their highest levels in more than two decades.

What the Fed Minutes Mean for Gold and Silver

The possibility of another Federal Reserve rate hike remains an important factor for precious metals markets. Higher interest rates and elevated Treasury yields can increase the opportunity cost of holding non-yielding assets such as gold.

At the same time, uncertainty surrounding inflation, economic growth and monetary policy can continue to support demand for safe-haven assets.

For gold and silver traders, upcoming U.S. economic data and comments from Federal Reserve officials will therefore remain important signals for determining the direction of precious metals prices.

FAQ’s

1. Why is the Federal Reserve considering another interest rate hike?
The Federal Reserve is considering another rate increase because inflation remains above its 2% target. Officials are also monitoring economic growth, labor-market conditions and the risk that stronger demand or supply shocks could keep inflation elevated for longer.

2. What is the Fed’s inflation target?
The Federal Reserve’s long-term inflation target is 2%. Policymakers monitor inflation indicators such as the Personal Consumption Expenditures Price Index to assess whether price growth is moving toward that target on a sustainable basis.

3. How can higher interest rates affect the U.S. economy?
Higher interest rates generally increase borrowing costs for households and businesses. This can reduce spending and investment, potentially slowing economic activity. At the same time, higher rates can help moderate demand and ease inflationary pressures over time.

4. Why are Treasury yields important for financial markets?
Treasury yields influence borrowing costs and the valuation of various financial assets. Rising yields can make interest-bearing investments more attractive and may put pressure on assets that do not generate regular income. They also reflect changing expectations about inflation, economic growth and Federal Reserve policy.

5. Why are upcoming economic data important for the Fed’s next decision?
Economic indicators provide policymakers with fresh information about inflation, employment, consumer demand and overall economic activity. The Federal Reserve has emphasized that future policy decisions will depend on incoming data and how it changes the outlook for inflation and economic growth.

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According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased 0.4% on a seasonally adjusted basis in August. On a year-over-year basis, consumer prices were up 3.4%. Both figures matched the Dow Jones consensus forecast.

However, underlying inflation showed somewhat greater strength than expected. Core CPI, which excludes volatile food and energy components, increased 0.3% during the month, coming in 0.1 percentage point above market expectations. The annual core inflation rate stood at 2.4%, in line with forecasts.

The August inflation report was particularly important because it represents the final major inflation reading available to the Federal Reserve before its policy meeting next week. The meeting is scheduled to conclude on Wednesday with a decision on the central bank’s benchmark interest rate.

Markets Increase Bets on Fed Rate Hike

Financial markets reacted strongly to the inflation figures, with traders increasing their expectations for a 25-basis-point increase in the Federal Reserve’s benchmark interest rate.

According to the CME Group’s FedWatch tracker, the probability of a quarter-point rate hike climbed to nearly 90% following the release. Before the CPI report, markets had been pricing in roughly a 70% probability of a rate increase.

“There’s no guarantee that the Fed will hike next week, but it’s hard to see how the central bank can justify leaving rates on hold,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.

Despite the stronger inflation figures, US stock market futures moved higher during morning trading as oil prices fell sharply. Treasury yields were mixed, while the two-year Treasury note, which is particularly sensitive to expectations for Federal Reserve policy, gained 4.6 basis points to 4.594%.

One basis point equals 0.01 percentage point.

Energy Prices Drive August Inflation

Energy prices were among the biggest contributors to the August CPI increase. Gasoline prices jumped 3.9% during the month and accounted for more than one-third of the overall increase in the consumer price index.

The broader energy index rose 2.1% in August amid concerns linked to escalating tensions in the Middle East. On an annual basis, the energy index was up 16.3%.

Gasoline prices increased 27.4% over the past year, while fuel oil prices surged 52%.

Food prices also moved higher, although the increase was modest. The food index rose 0.1% during August, while prices for food consumed at home remained unchanged. On a yearly basis, the food index increased 2.7%.

Shelter and Transportation Costs Also Rise

Shelter costs provided another notable contribution to inflation, rising 0.3% in August after showing signs of moderation during the previous two months.

Transportation services also recorded a monthly increase of 0.5%. Used cars and trucks became 0.4% more expensive, while new vehicle prices increased 0.3%.

The broad-based nature of the price increases added to concerns that inflationary pressure may not be easing quickly enough for the Federal Reserve.

Not every category moved higher. Apparel prices remained unchanged, while motor vehicle insurance costs declined 0.8% during the month.

Fed Faces Inflation and Policy Dilemma

The latest inflation figures have intensified the debate over the direction of Federal Reserve policy. While several policymakers have supported a more patient approach, Fed Chairman Kevin Warsh has repeatedly stressed the importance of bringing inflation back toward the central bank’s 2% target.

Warsh recently said that if inflation data fail to improve, “we have work to do.” His comments were broadly viewed by markets as supportive of a potential rate increase.

“Chair Warsh and others signaled that interest rates can remain on hold only if disinflation continues and today’s August report did not deliver that,” said Kathy Bostjancic, chief economist at Nationwide. “Further, the renewed march higher in oil, gasoline and diesel prices add to concerns that higher energy prices could spill over to other goods and services and inflation expectations.”

Nationwide has now revised its expectations and anticipates a quarter-point rate increase at the Federal Reserve’s upcoming meeting.

The federal funds rate is currently maintained within a target range of 3.5% to 3.75%, where it has remained throughout 2026.

What the August CPI Report Means for Investors

The latest inflation data suggest that the Federal Reserve continues to face a difficult policy environment. While core inflation remains considerably below the headline rate, the stronger-than-expected monthly increase and renewed pressure from energy prices could make policymakers more cautious about easing financial conditions.

Investors will now closely monitor the Federal Reserve’s upcoming decision, along with policymakers’ updated economic projections and guidance on future interest-rate moves. The path of inflation, energy prices, Treasury yields and consumer demand is likely to remain important for financial markets in the coming months.

FAQ’s

1. What was the US inflation rate in August 2026?
The US Consumer Price Index increased 3.4% on an annual basis in August 2026, while prices rose 0.4% during the month on a seasonally adjusted basis. The headline figures were broadly in line with economists’ expectations.

2. Why did inflation remain elevated in August?
Higher energy prices were a major contributor to the August increase. Gasoline prices rose 3.9% during the month, while the broader energy index gained 2.1%. Shelter, transportation services, used vehicles and new vehicles also recorded increases.

3. What happened to core inflation in August?
Core CPI, which excludes volatile food and energy prices, increased 0.3% in August. This was 0.1 percentage point higher than economists had expected. The annual core inflation rate stood at 2.4%, matching the market forecast.

4. How could higher energy prices affect the broader economy?
A sustained increase in oil, gasoline and diesel prices can raise transportation and production costs for businesses. Companies may eventually pass those higher expenses on to consumers, potentially creating additional inflationary pressure across goods and services.

5. Why are investors closely watching the Federal Reserve’s next decision?
The August inflation report was the final major inflation indicator available to the Federal Reserve before its upcoming policy meeting. The stronger-than-expected core CPI reading and elevated energy costs have increased expectations that policymakers could raise the benchmark interest rate by 25 basis points.

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Gold prices surged past the crucial $3,050 per ounce mark on the Comex as investors reacted to the Fed’s policy stance. In the domestic market, gold on MCX neared ₹89,000 per 10 grams, while silver continued to trade above ₹1,00,000 per kilogram. Market analysts suggest that fears of stagflation, a slowing economy, and geopolitical tensions will continue to drive demand for precious metals.

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PBoC Followed US Fed
The People’s Bank of China maintained the 1-year loan prime rate at 3.1% and the 5-year LPR at 3.6%, unchanged since the quarter-point cut in October. This decision aligns with the U.S. Federal Reserve’s recent move to keep benchmark interest rates steady.

Fed’s Economic Projections Raise Alarm
The Federal Open Market Committee (FOMC) adjusted its economic projections, lowering the GDP growth forecast for 2025 to 1.7%, down from the previous estimate of 2.1%. At the same time, the inflation forecast was raised, with core prices expected to rise by 2.8% annually, up from the previous projection of 2.5%. This divergence between inflation and economic growth has fueled fears of stagflation—a scenario where economic stagnation is coupled with rising prices.

In a statement, the FOMC noted that “uncertainty around the economic outlook has increased,” adding that the Fed remains “attentive to the risks on both sides of its dual mandate.” With the U.S. economy facing potential tariff shocks and the risk of increasing unemployment due to mass layoffs, the likelihood of stagflation is becoming a key concern.

Market Reaction: Gold and Silver Gain Momentum
Following the Fed’s announcement, gold and silver showed high volatility in early trading. Despite some profit booking, gold futures on Comex remained strong above $3,050 per ounce, while silver held firm above $34 per ounce.On Wednesday, international gold futures for April settled at $3,041.20 per troy ounce, up by 0.01%, while silver May futures closed at $34.205 per troy ounce, down by 1.76%.

In the domestic market, gold April futures on MCX settled at ₹88,602 per 10 grams, down 0.14%, while silver May futures ended at ₹99,924 per kilogram, down 1.33%. Analysts noted that the strengthening rupee led to some downward pressure on domestic gold prices.

Expert Views on Gold and Silver’s Future Outlook

Manoj Kumar Jain, Director, Prithvi Finmart
Jain expects gold and silver prices to remain volatile amid fluctuations in the dollar index, trade war concerns, and inflation data. However, he believes gold and silver could hold their key support levels of $2,922 and $32.40 per troy ounce, respectively, on a weekly closing basis.
Gold Support Levels: $3,022 – $3,008 per troy ounce
Gold Resistance Levels: $3,055 – $3,080 per troy ounce
Silver Support Levels: $34.00 – $33.74 per troy ounce
Silver Resistance Levels: $34.50 – $34.84 per troy ounce

MCX Levels:
Gold: Support at ₹88,360 – ₹88,080, resistance at ₹88,880 – ₹89,300
Silver: Support at ₹99,200 – ₹98,400, resistance at ₹1,00,750 – ₹1,02,000

Jain recommends buying gold above ₹88,800 with a stop loss of ₹88,550 for a target of ₹89,300. For silver, he suggests buying above ₹1,00,000 with a stop loss of ₹99,200 for a target of ₹1,02,000.

Kedia Commodity: Technical Analysis
According to Kedia Commodity, gold’s technical outlook indicates long liquidation, with open interest falling by 5.37% to 13,263 contracts. They predict:
Gold Support Levels: ₹88,355, with a break below testing ₹88,105
Gold Resistance Levels: ₹88,935, with a breakout potentially pushing prices to ₹89,265
For silver, open interest dropped 3.58% to 22,417 contracts.
Silver Support Levels: ₹99,280, with a break below possibly testing ₹98,640
Silver Resistance Levels: ₹1,01,015, with a breakout potentially pushing prices to ₹1,02,110

IIDM: Key Resistance & Support Levels
Gold Resistance: $3,060 (if crossed, the next upside move could reach $3,075 – $3,090)
Gold Support: $3,030 – $3,025 (breaking below could lead to further decline toward $3,015 – $3,000)

SMC Global: Trading Range for Gold and Silver
SMC Global expects gold to trade within ₹88,800 – ₹89,200 and silver between ₹99,800 – ₹1,00,800, with a sideways to bullish bias.

Thursday, March 20, 2025
United States
06:00 PM – Initial Jobless Claims Moving Average
United Kingdom
05:30 PM – Bank of England Interest Rate Decision

Friday, March 21, 2025
United States
02:00 AM – Federal Reserve Balance Sheet (March 19)

Other Major Events
Tariff Announcements by President Trump
Trump’s Statement on Trade and Economy
Russia-Ukraine War Developments

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The post-meeting statement signaled optimism about the U.S. labor market but notably dropped the previous mention of inflation making progress toward the 2% target, suggesting the Fed remains cautious about future rate movements.

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Fed Chair Jerome Powell reiterated that he has not communicated with President Donald Trump, who has openly called for immediate rate cuts to support economic growth. However, the Fed remains independent in its decision-making, with markets now expecting rates to stay unchanged until at least June 2025.

Global Rate Moves: BoC Cuts, ECB Meeting Next

While the Fed held steady, the Bank of Canada (BoC) reduced its key interest rate by 25 basis points to 3.0%, becoming the first major central bank to cut rates in 2025. Investors are now looking ahead to the European Central Bank (ECB) meeting today at 6.45 PM India Time, where another rate cut is widely anticipated.

Gold & Silver Market Reaction

Gold and silver prices showed mixed trends after the Fed’s decision:

• Gold April futures settled at $2,793.50 per troy ounce, down 0.04%.
• Silver March futures rose 1.65% to $31.393 per troy ounce.
• On MCX (India), Gold April futures closed at ₹80,874 per 10 grams (-0.03%), while Silver March futures gained 0.90% to ₹91,866 per kg.

Gold prices dipped from session highs after the Fed’s cautious stance on inflation, while silver extended gains amid increased safe-haven buying.

Market Outlook: What’s Next for Gold & Silver?

Manoj Kumar Jain, Director at Prithvi Finmart, expects continued volatility in precious metals due to the dollar index fluctuations, global economic uncertainty, and central bank policy decisions.

• Gold key levels:
  • Support: $2,774-$2,758 per troy ounce
  • Resistance: $2,810-$2,828 per troy ounce
• Silver key levels:
  • Support: $31.10-$30.84 per troy ounce
  • Resistance: $31.64-$32.00 per troy ounce

MCX Gold & Silver Outlook

On the MCX (India), gold and silver are expected to remain volatile:

• Gold (April futures):
  • Support: ₹80,600-₹80,325
  • Resistance: ₹81,220-₹81,500
• Silver (March futures):
  • Support: ₹91,100-₹90,450
  • Resistance: ₹92,600-₹93,300

Jain suggests buying silver around ₹91,400 with a stop loss of ₹90,650 and a target of ₹93,000.

With the ECB’s policy decision due later today and Trump’s tariff plans adding to market uncertainty, gold and silver prices are likely to remain volatile in the coming sessions.

Key Events to Watch This Week
Thursday, January 30, 2025
03:30 PM (Euro Area): GDP Growth Rate QoQ Flash (Q4), Unemployment Rate (DEC)
06:45 PM (Euro Area): ECB Interest Rate Decision
07:15 PM (Euro Area): ECB Press Conference

Thursday, January 30, 2025
US
07:00 PM (US): GDP Growth Rate QoQ Adv (Q4),
07:00 PM (US): GDP Price Index QoQ Adv (Q4),
07:00 PM (US): Initial Jobless Claims (JAN/25),
07:00 PM (US): Core PCE Prices QoQ Adv (Q4),
07:00 PM (US): Jobless Claims 4-week Average (JAN/25)

Friday, January 31, 2025
07:00 PM (US): Core PCE Price Index MoM (DEC),
07:00 PM (US):Personal Income MoM (DEC),
07:00 PM (US):Personal Spending MoM (DEC), ‘
07:00 PM (US): PCE Price Index MoM (DEC)

Saturday, February 1, 2025
US: Trump Tariff Orders
11 AM India: Budget Announcement
India: MCX Open for Gold, Silver Trading

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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here

On Tuesday, gold and silver extended their decline following better-than-expected U.S. retail sales data, which showed a 0.7% month-on-month growth, surpassing the forecasted 0.5% increase. The strong retail figures have capped gains for gold and silver while raising concerns about the Fed’s guidance for 2025 rate cuts amidst weak job markets, rising inflation, and robust services activity.

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Meanwhile, the dollar index and U.S. bond yields held steady ahead of the Federal Open Market Committee (FOMC) meeting. Adding to the pressure on precious metals was Bitcoin’s impressive rally, crossing the $108,000 mark and attracting significant investor attention away from traditional asset classes.

However, gold and silver prices have found some support at lower levels due to anticipated rate cuts, ongoing geopolitical tensions, and weakness in global equity markets. As central bank policies take center stage this week, gold and silver markets are bracing for heightened volatility that could set the tone for the months ahead.

Market Insights and Technical Levels
Manoj Kumar Jain, Director at Prithvi Finmart, expects significant volatility in gold and silver this week, influenced by movements in the dollar index and FOMC outcomes. He highlights key weekly support levels at $2,588 for gold and $29.88 for silver, with resistance at $2,694 and $31.50, respectively.

For today’s trading session:
Gold:
Support: $2,646–$2,632
Resistance: $2,678–$2,694
MCX Levels: Support at ₹76,480–₹76,200, Resistance at ₹77,200–₹77,550

Silver:
Support: $30.64–$30.40
Resistance: $31.20–$31.50
MCX Levels: Support at ₹90,100–₹89,500, Resistance at ₹91,650–₹92,400

Commodity Insights:
Kedia Commodity
Gold trading range for the day is 76135-77565.
Silver trading range for the day is 89515-91825.

IIDM Update
Key resistance is located at 2660 above which we can see an upside move towards 2670-2685.
Crucial support is seen at 2640 below which a further dip towards 2625-2610 can be seen.

Big Events of The Week
Wednesday, December 18, 2024
US
7:00 PM: Building Permits Prel (NOV)
7:00 PM: Housing Starts (NOV)
12:30 AM: Fed Interest Rate Decision
12:30 AM: FOMC Economic Projections
12:30 AM: Interest Rate Projection – Longer Term
1:00 AM: Fed Press Conference
Euro Area (EA)
3:30 PM: Inflation Rate YoY Final (NOV)

Thursday, December 19, 2024
US
7:00 PM: GDP Growth Rate QoQ Final (Q3)
7:00 PM: GDP Price Index QoQ Final (Q3)
7:00 PM: Initial Jobless Claims (DEC 14)
7:00 PM: Core PCE Prices QoQ Final (Q3)
8:30 PM: Existing Home Sales (NOV)

United Kingdom (UK)
5:30 PM: BoE Interest Rate Decision

Japan (JP)
8:30 AM: BoJ Interest Rate Decision

Friday, December 20, 2024
7:00 PM: Core PCE Price Index MoM (NOV)
7:00 PM: Personal Income MoM (NOV)
7:00 PM: Personal Spending MoM (NOV)
8:30 PM: Michigan Consumer Sentiment Final (DEC)

China
6:45 AM: Loan Prime Rate 1Y
6:45 AM: Loan Prime Rate 5Y

IBJA Gold Silver Prices Without GST
Gold
999 Rs 76570
995 Rs 76263
916 Rs 70138
750 Rs 57428
585 Rs 44794
Silver
999 Rs 88950

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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here.

On Wednesday, both gold and silver closed lower in the international markets. Gold’s December futures settled at $2,676.30 per troy ounce, a decline of 2.67%, while silver’s December futures ended at $31.331 per troy ounce, down by 4.41%. Domestic markets mirrored this trend, with gold December futures settling at ₹76,655 per 10 grams, a 2.36% drop, and silver December futures closing at ₹90,820 per kilogram, down by 4.04%.

The recent sharp decline in gold and silver prices followed Donald Trump’s win in the U.S. presidential election, which strengthened the U.S. dollar and bond yields to four-month highs, reducing safe-haven demand for precious metals. U.S. equity markets also surged to record levels, contributing to this downward pressure on gold and silver prices. Bitcoin, meanwhile, spiked by over 7% in a single session, further detracting from interest in precious metals.

The Federal Reserve is widely expected to announce another rate cut when it concludes its meeting on Thursday. Market watchers will also focus on what Fed Chair Jerome Powell signals about future policy, especially regarding potential rate cuts in the coming months. Currently, the Fed’s interest rate is targeted between 4.75%-5.0%, with market expectations leaning towards another quarter-point reduction in December, followed by a pause in January and multiple cuts through 2025.

Manoj Kumar Jain, Director at Prithvi Finmart, noted that gold is nearing its key support level of $2,664 per troy ounce, with a potential drop to $2,620 if prices slip below this level. Similarly, silver may test support at $30.80 per troy ounce. “We expect gold and silver prices to remain volatile this week ahead of the Fed policy announcement, fluctuations in the dollar index, and ongoing geopolitical tensions,” Jain stated. He added that gold has support at $2,664-$2,620 and resistance at $2,700-$2,722, while silver’s support is at $31.80-$31.34 with resistance at $31.66-$32.20 in today’s session.

In the MCX, gold has support at ₹76,150-₹75,500 and resistance at ₹77,000-₹77,440, while silver has support at ₹90,000-₹88,650 and resistance at ₹91,850-₹93,000. Jain advised caution and suggested staying out of precious metals trading today until the Fed’s policy announcement is released.

Key Events Impacting Gold and Silver Prices This Week
Thursday, November 7:
7:00 PM IST – U.S. Initial Jobless Claims (week of November 2)
7:00 PM IST – U.S. Q3 Nonfarm Productivity (Preliminary)
12.30 AM Conclusion of U.S. Federal Reserve Meeting

Friday, November 8:
Fed Rate Impact on Indian Market
8:30 PM IST – Preliminary Michigan Consumer Sentiment Index for November
9:30 PM IST – Speech by U.S. Fed Governor Bowman

United Kingdom:
Thursday, November 7 – Bank of England Interest Rate Decision

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Disclaimer: The information in this article is intended for informational purposes only and reflects the views of the expert. Before making any investment decisions, it is recommended to seek the advice of a financial advisor. The individuals associated with Gold Price Today do not engage in the personal buying, selling, or trading of gold or silver. We cannot be held liable for any gains or losses incurred.

This week brings critical events that could influence gold prices, including the U.S. Presidential election and the Federal Reserve policy meeting. Additionally, a potential stimulus announcement from China is on the horizon, which could impact global markets and precious metal trends. Given this lineup, traders are adopting a cautious stance.

China’s parliament convened on Monday to review a proposal aimed at raising the local government debt limit, state media reported. The new debt would be allocated toward addressing “hidden” or off-balance-sheet liabilities. Finance Minister Lan Fo’an presented the plan at the session.

The Standing Committee of the National People’s Congress, which is meeting throughout the week, is widely expected to endorse additional fiscal measures to bolster China’s slowing economy.

Gold and silver are experiencing some profit-taking as U.S. 10-year bond yields remain above 4.25%. Meanwhile, the dollar index has shown some pullback from recent highs, with mixed performance in global equity markets supporting the safe-haven appeal of gold and silver.

Manoj Kumar Jain, Director at Prithvi Finmart, stated, “We expect gold and silver prices to remain volatile this week with the U.S. elections, Fed policy meetings, dollar index fluctuations, and geopolitical tensions. However, gold and silver could hold support levels of $2,664 and $30.80 per troy ounce, respectively, on a weekly closing basis.”

According to Jain, key technical levels include support for gold at $2,734-$2,722 and resistance at $2,762-$2,778 per troy ounce, while silver shows support at $32.40-$32.00 and resistance at $32.84-$33.20. On the MCX, gold has support at Rs 78,200-Rs 77,950 and resistance at Rs 78,660-Rs 78,850, with silver showing support at Rs 93,600-Rs 92,850 and resistance at Rs 94,950-Rs 95,600.

Jain advises staying on the sidelines in the bullion markets today due to the uncertainty surrounding the U.S. Presidential elections.

Key Events Impacting Gold and Silver Prices This Week
Tuesday, November 5:
Late night IST – U.S. Presidential Election Results
7:00 PM IST – U.S. Balance of Trade for September
8:30 PM IST – U.S. ISM Services PMI for October

Wednesday, November 6:
Final U.S. Election Results
Start of U.S. Federal Reserve Meeting

Thursday, November 7:
7:00 PM IST – U.S. Initial Jobless Claims (week of November 2)
7:00 PM IST – U.S. Q3 Nonfarm Productivity (Preliminary)
12.30 AM Conclusion of U.S. Federal Reserve Meeting

Friday, November 8:
Fed Rate Impact on Indian Market
8:30 PM IST – Preliminary Michigan Consumer Sentiment Index for November
9:30 PM IST – Speech by U.S. Fed Governor Bowman

Additional Global Events
Japan:
Wednesday, November 6 – Bank of Japan Monetary Policy Meeting Minutes

United Kingdom:
Thursday, November 7 – Bank of England Interest Rate Decision

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Youtube Channel- https://youtube.com/GoldPriceTodayNews (5 Million Views)
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Disclaimer: The information in this article is intended for informational purposes only and reflects the views of the expert. Before making any investment decisions, it is recommended to seek the advice of a financial advisor. The individuals associated with Gold Price Today do not engage in the personal buying, selling, or trading of gold or silver. We cannot be held liable for any gains or losses incurred.

Gold’s Dual Role: A Complex Interplay of Consumer Good and Investment Asset
World Gold Council in report says Gold, acting as both a consumer good and an investment asset, finds itself at the crossroads of various influences, including investment flows, fabrication demand, and central bank initiatives. The Council explores the intricate relationship between gold and economic scenarios, shedding light on its historically divergent performance during periods of soft landings. Unlike bonds and stocks, gold has exhibited varied reactions, prompting a meticulous examination of the driving forces behind this phenomenon.

Competing Forces and Potential Implications
The Council identifies two pivotal forces driving gold’s trajectory: lower nominal interest rates and lower inflation. While lower nominal rates are expected to provide a respite for gold, a closer examination suggests a nuanced picture. The anticipated drop in longer maturity yields, influenced by policy rate cuts, may translate into a modest gain for gold. However, the equilibrium is disrupted by factors such as inflation trends, real interest rates, and potential constraints on gold consumer demand, challenging the optimism surrounding policy rate easing.

The report says “Lower nominal interest rates should bring a respite for gold: 75–100 bps of policy rate cuts are likely to translate into no more than about c.40–50bps of longer maturity yield drops. We estimate this response given the bull steepening that has occurred during past soft landings and we also factor in continued term premium pressure, quantitative tightening and high issuance supply in 2024. That drop in longer maturity yields, all else being equal, suggests a gain of about 4% for gold.”

Further the report says ” If inflation cools more quickly than rates – as it is largely expected to do – real interest rates will stay elevated. In addition, subpar growth could constrain gold consumer demand. In summary, expected policy rate easing may be less sanguine for gold than it appears on the surface.”

Recessionary Outperformance and Market Dynamics
Exploring the potential scenario of a recession, the Council contends that weaker growth could align with historical trends, creating a positive environment for high-quality government bonds and gold. However, the report acknowledges the intricacies of economic landscapes, presenting potential challenges for gold in the event of a no-landing scenario, where higher rates and a stronger US dollar could impede its performance.

Factors Favoring Gold in 2024: Geopolitical Risks and Central Bank Demand
Intriguingly, the Council introduces two pivotal factors favoring gold in the coming year. Geopolitical risks, exemplified by events such as the SVB failure and the Israel-Hamas conflict in 2023, added significant impetus to gold’s performance. With major global elections on the horizon, the need for portfolio hedges is anticipated to rise, potentially bolstering gold’s standing. Additionally, the report underscores the crucial role of central bank demand, which has defied expectations in recent years and is expected to continue, providing a notable boost to gold’s performance.

Conclusion: The Unpredictable Path Ahead
As the World Gold Council navigates the intricate landscape of 2024, it underscores the historical patterns, potential market dynamics, and the influence of geopolitical and central bank factors on gold’s trajectory. Whether the year unfolds as a soft landing, no-landing, or recessionary scenario, the Council advises a cautious approach, maintaining a strategic allocation to gold in investment portfolios as a prudent risk-management strategy.

Following the Federal Reserve’s decision, the price of gold saw a $14 increase, reaching $1,967, while silver experienced a $0.37 gain, reaching $23.83.

Read Full Statement by FOMC as it is Here
“Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have slowed in recent months but remain strong, and the unemployment rate has remained low. Inflation remains elevated.

The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller.”