Fed Holds Rates Steady, India Gold Prices Face Rupee Pressure — SkimNews
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- Federal Open Market Committee kept the federal funds rate unchanged at 3.75%–4% on October 28 after a 25-basis-point hike in September, maintaining tight monetary policy amid persistent US inflation.
- Souvik Biswas of Bajaj Capital said the Fed's pause was expected and projected flat gold prices until the US midterm elections, with low double-digit returns possible in gold by 2027.
- Vedika Narvekar of Anand Rathi Shares & Stock Brokers noted markets are pricing in a potential December rate hike, which could strengthen the dollar and weigh on gold, though geopolitical risks may cushion declines.
- Dr Vikas Gupta of OmniScience Capital stated higher US rates could keep international gold flat or lower, but rupee depreciation might lead to mild increases in domestic gold prices despite no global rise.
- Sanjiv Bajaj of Bajaj Capital advised investors to assess existing gold holdings and consider gradual purchases, suggesting a 5–10% portfolio allocation as reasonable for most.
Why it matters: Indian investors face a divergence between stable international gold prices and potential domestic price increases due to rupee depreciation, making timing and allocation critical. With festive and wedding demand adding upward pressure, those under-allocated may need to act despite uncertainty, while overexposed investors risk redundancy in a non-yielding asset.
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