Gold falls near $4,000 as strong US GDP dims rate-cut hopes
Gold dropped about 1% to the $4,020–$4,030 range on October 29, 2026, after US third-quarter GDP growth of 3.4% annualized beat expectations, reducing pressure on the Fed to cut rates soon.
The headline growth figure masked softer personal income and spending, pointing to a cooling consumer even as overall output stayed solid. Core PCE inflation held at 0.3%, and weekly jobless claims came in at a low 194,000, reinforcing the view that the US Federal Reserve (Fed) has little urgency to ease policy.
That combination kept real yields elevated, a headwind for non-yielding gold (XAU/USD). The GDP price index did cool to 2.3%, but this was not enough to shift the broader market narrative of a resilient economy and sticky inflation, which continues to support the case for the Fed to hold rates rather than rush toward cuts.
Separately, the European Central Bank (ECB) left interest rates unchanged and flagged rising inflation risks tied to energy costs. However, policymakers avoided a more hawkish tone given concerns about sovereign borrowing costs in the eurozone, leaving the euro under pressure from both inflation and credibility concerns.
On the charts, gold pulled back from recent highs near $4,060–$4,070 toward the closely watched $4,000 support level. Holding that zone could allow prices to stabilize, while a break below it risks triggering broader selling.
This matters for markets because a stronger-than-expected US GDP print reduces near-term Fed rate-cut expectations, supporting the dollar and real yields while weighing on gold. Any future signs of a weakening US consumer, however, could revive demand for the metal as a hedge against slower growth.
Source: Kitco News