Gold hits a 2026 low as the Fed plays the Grumpy cycle 🪙

Gold fell below $3,900 per ounce on October 30, reaching its lowest level of 2026 and leaving the precious metal roughly 30% below its January peak. The decline puts gold on track for a second consecutive monthly loss, with $4,000 now acting as fragile support after repeated tests in recent sessions.

Strong US economic data has reinforced expectations of tighter monetary policy. Third-quarter GDP growth beat expectations, while September PCE inflation rose 0.5% on the month and 3.6% year-on-year. Traders still see a possible Fed hike in December despite the Fed holding rates at 3.75% to 4.00% this week. Higher oil prices, driven by Middle East supply fears, have also kept real yields elevated and raised the cost of holding a non-yielding asset. Speculative selling and ETF outflows amplified the move. Gold (XAU) Price Performance – YTD. Source: TradingView.

Standard Chartered’s Suki Cooper warned that gold must hold support at $3,886, with a sustained break potentially triggering a deeper correction. JPMorgan Private Bank’s Yuxuan Tang also sees further downside risk, expecting Fed hikes in December and again in early 2027. The bank forecasts that 10-year Treasury yields could peak at 5.25% to 5.50%. “Gold will find a solid bottom when rates peak,” Tang said, citing thin liquidity.

Longer-term forecasts are more optimistic. A Reuters poll of 30 analysts found median price forecasts of $4,495 for 2026 and $4,650 for 2027. Cooper expects a recovery as attention shifts to de-dollarization and currency debasement. Traders are watching $4,000 on the upside and $3,886 on the downside, while the US midterms and the December Fed decision could set gold’s next move.