Gold Prices Soar 1%, but Dark Clouds Still Loom
Jakarta, CNBC Indonesia — Gold prices rebounded, supported by falling oil prices that eased inflation concerns. Market participants are now awaiting the outcome of the Federal Reserve’s monetary policy meeting for clues about the future direction of US interest rates.
According to Refinitiv, gold closed at US$4,057.81 per troy ounce on Tuesday, 27 October 2026, up 1.03%.
The increase extended gold’s positive run, with prices rising for a second consecutive day.
At 6.39am WIB on Wednesday, 28 October 2026, gold was up 0.07% at US$4,060.55 per troy ounce.
Peter Grant, vice-president and senior metals strategist at Zaner Metals, said lower oil prices could support gold by easing inflation concerns and reducing the likelihood of the Fed taking a hawkish stance.
Grant said markets were also being influenced by developments in the Middle East and ongoing negotiations.
“Falling oil prices are likely to provide a boost to gold by easing inflation concerns and, to some extent, reducing the likelihood of a hawkish Fed,” Peter Grant, vice-president and senior metals strategist at Zaner Metals, was quoted by Refinitiv as saying.
“I believe current market movements are still being driven solely by news from the Middle East and the negotiations under way,” he added.
Oil futures fell by more than 1% on Tuesday as markets focused on peace talks in the Middle East. Nevertheless, oil prices remained near multi-month highs amid the Houthi–Saudi Arabia conflict and the prospect of renewed US–Israeli attacks, which continue to weigh on markets.
However, Jim Wyckoff, a market analyst at American Gold Exchange, warned that a sustained rise in oil prices could fuel inflation and prompt central banks to tighten monetary policy. Such a scenario could weigh on gold.
Fed officials have signalled that they will not resume raising short-term US interest rates.
But with inflation concerns still a key focus, investors expect the pause in rate rises may not last long.
Higher interest rates increase the opportunity cost of holding gold, which pays no interest.
According to the CME FedWatch Tool, market participants now assign an 83% probability to the Fed raising interest rates in December.
Investors are also awaiting the release of US Personal Consumption Expenditures (PCE) data on Thursday. This inflation measure is one of the Fed’s main benchmarks as it seeks to meet its 2% inflation target.
A Reuters survey showed analysts had lowered their gold price forecasts for 2026 for a second consecutive quarter. The cuts were driven by high US Treasury yields, a stronger US dollar and expectations that interest rates would remain higher for longer. Even so, analysts still expect gold prices to recover in 2027.