On the afternoon of October 29, world gold prices increased by more than 1% waiting for the Fed's decision and Powell's speech.
On the afternoon of October 29, world gold prices increased by more than 1% after hitting a three-week low, as investors expected the Fed to lower interest rates and awaited a speech from Chairman Jerome Powell.
After many consecutive declines, gold prices jumped more than 1% on October 29 as investors returned to buying at low prices.
Specifically, spot gold price increased 1% to 3,991.59 USD/ounce, while December futures contract increased 0.6% to 4,005.6 USD/ounce.
This is a remarkable recovery session for gold prices after hitting their lowest level since early October. Analysts say bottom-fishing buying pressure is supporting the precious metals market again.
Gold prices have become more attractive after losing more than 10% of their value in a short period of time, according to Peter Fertig of Quantitative Commodity Research. This sharp correction creates an opportunity for investors and central banks to increase purchases to replenish reserves.
In addition, expectations that the Fed will cut interest rates by 25 basis points at its upcoming meeting also helped gold prices to improve, because a low interest rate environment is often beneficial for non-interest-bearing assets like gold.
Gold prices are also affected by global political developments. US President Donald Trump is on the final leg of his Asia tour, hoping to reach a trade deal with South Korea and China.
The meeting between Trump and President Xi Jinping scheduled to take place in South Korea is expected to help cool trade tensions, thereby reducing demand for safe-haven assets such as gold.
However, ANZ believes that the recent sharp drop in gold prices could prompt central banks to buy more, creating support for the market.
Experts believe that gold prices still have the potential to increase in the short term, especially when the Fed officially lowers interest rates. Gold has benefited from economic instability and low interest rates.
According to Citigroup's forecast, gold prices could fluctuate around $4,300 - $4,500/ounce in the first half of 2026 if the Fed cuts interest rates twice.
Goldman Sachs even expects gold prices to surpass $4,700 an ounce by 2027. However, in the short term, if the $4,000 an ounce mark is breached, gold prices could fall to $3,900 or even $3,850 an ounce before finding a new equilibrium.
Gold prices have risen about 52% year-to-date, hitting a record high of $4,381.21 an ounce on October 20, thanks to geopolitical concerns and increased buying by central banks.
In addition to gold, silver also increased by 2% to $47.98/ounce, showing that positive sentiment is returning to the precious metals market.
