Gold is holding near $4,160 while traders await U.S. Inflation data that could influence expectations for Federal Reserve policy. Markets price about a 23% chance of an October rate increase and an 88% chance of another increase by December. New York Fed President John Williams and Boston Fed President Susan Collins have both indicated that another increase this year remains possible.
Gold’s short-term recovery remains above a rising trendline near $4,159. Investment demand has provided support: global gold exchange-traded funds added 67 tonnes in September, lifting holdings to a record 4,256 tonnes, while third-quarter inflows reached $31 billion.
The metal’s physical market is tighter than gold’s, with a sixth consecutive annual deficit projected for 2026, even as industrial fabrication is forecast to fall 2% to about 650 million ounces.
Growth is expected from projects and operations in Mexico, China, Canada and Morocco, while lower output in Peru is expected to offset some gains. Recycling is projected to exceed 200 million ounces, but the market is still forecast to record a 67-million-ounce deficit and rely on above-ground inventories. Against that backdrop, the next major near-term test for both metals is whether inflation keeps rate-hike expectations elevated.