Gold Drops 1,211 Pips to a One-Year Low on Fed Hike Bets

Gold fell 1,211 pips this week, from $3,996.91 to $3,875.82, and Friday's close was also the week's lowest hourly close. A hawkish Fed hold and strong US data pushed up bets on a December rate hike. On Friday, a Wall Street sell-off made it worse, with gold losing 1,321 pips in that one day.

The week started on a firmer footing. Gold gained 85 pips on Monday as cheaper oil eased worries about further Fed tightening. It added 573 pips on Tuesday, and the week's high was $4,075.03. After that it fell every day: 84 pips on Wednesday, 464 on Thursday and 1,321 on Friday.

The high-impact news

US durable goods orders (Tue 27 Oct, 12:30 UK). This tracks orders for long-lasting goods such as machines and vehicles, which shows how much businesses are investing. For gold it is a growth signal that can shift rate expectations. Orders rose 1.8% against a 0.7% forecast. Gold barely moved: down 3 pips after one hour, well below its usual move of about 39 pips. Four hours later it was up 357 pips. In our view, that later gain had little to do with durable goods. The same window included the consumer confidence beat, weaker new home sales, a rebound in tech stocks and lower oil. Since April 2021, beats on this release have not pushed gold one clear way: after a clear beat, gold's first hour was up 12 of 25 times. More detail is in our US durable goods orders breakdown.

US consumer confidence (Tue 27 Oct, 14:00 UK). This measures how confident US households feel about the economy. It came in at 91.7 against a forecast of 81.5. Gold rose 225 pips in the first hour, roughly five times its usual move of about 44 pips, and reached a session high of $4,048. After four hours it was up 270 pips. In our view, the reason behind the rebound mattered more than the number: confidence recovered as fuel prices eased. With oil retreating and worries about inflation easing, gold had room to rise. The record shows no clear pattern: after a clear beat, gold's first hour was up 9 of 19 times. See our US consumer confidence breakdown.

US core PCE inflation (Thu 29 Oct, 12:30 UK). This is the Fed's preferred inflation measure, excluding food and energy, over the month. It rose 0.3% against a 0.2% forecast. Gold was up 6 pips after one hour, then down 108 pips after four. The usual pattern is a faster drop: in 20 clear beats since April 2021, gold's first hour fell 14 times, by a middle amount of −24 pips. This time the selling came later. The same release time also brought Q3 GDP growth of 3.4% and a sixth straight week of jobless claims below 200k. In our view, that mix of strong growth and firm inflation built gradually into the case for tighter Fed policy. More in our US core PCE inflation breakdown.

What else moved gold

On Wednesday the Fed held rates in a 10 to 2 vote, with the two dissenters favouring a hike and little guidance given. Market bets on a December hike rose above 70%. The dollar index reached a two-week high and came close to its 2026 highs. Oil above $100 kept inflation fears alive through the week.

On Friday, AI spending worries hit tech stocks, and the Wall Street sell-off triggered liquidation across metals. Gold broke below $3,900 to a one-year low even as bond yields fell and the dollar weakened. Silver dropped through $50 to an 11-month low.

Demand news was mixed. Chinese households were buying the dip near $4,000, and China's gold imports through Hong Kong picked up in September. Russia's gold reserves are down 62 tonnes this year. Hopes for US-Iran diplomacy limited demand for safe havens. Elsewhere, the Bank of Canada raised rates by 25 basis points, while the ECB and the Bank of Japan left policy unchanged.

What the coverage is focused on now

At the end of the week, the coverage was mostly about the chance of a December Fed hike, driven by strong US data and inflation pushed up by oil. A second theme was why gold kept falling even as yields fell and the dollar weakened, with the tech-led sell-off and liquidation given as the explanation. Silver's slide to an 11-month low and gold's one-year low also drew a lot of attention.

Get it live in the Newsroom

The Newsroom in the Trade By Focus app shows this as it happens: every gold article read as it comes in, which way it leans and what it is about, plotted against gold's price, alongside the calendar and gold's reaction to every release. Open the Newsroom

Important

For analysis purposes only. This describes last week's gold news and what gold did; it is not financial advice or a recommendation to trade. The news is no guide to where gold goes next. Trading carries a high risk of losing money.