On October 28, COMEX gold traded in a wide range around the 4,000 level, settling at $4,081.2 per ounce with a gain of 0.16%. In the domestic night session, SHFE gold opened higher but closed lower, settling at 868.08 yuan per gram with a decline of 0.23%.
In the early hours of October 29, the Federal Reserve's FOMC voted 10 to 2 to keep the federal funds rate target range unchanged at 3.75% to 4.00%. The two dissenting votes came from Fed Governor Cook and Cleveland Fed President Hammack, both of whom advocated an immediate 25 basis point rate hike. It was the first dissenting vote cast by Cook since she joined the Fed in 2022, a detail that in itself indicates that hawkish pressure within the committee has not faded simply because the Fed chose to hold rates steady.
Following the announcement, spot gold briefly edged higher before pulling back, oscillating repeatedly within a narrow range of about 1%. The U.S. dollar index weakened slightly, while the 10-year Treasury yield climbed to 5.028% and the two-year yield reached 4.774%. The rate decision itself was fully in line with market expectations, so gold's reaction was more a matter of short-term positioning jockeying rather than directional pricing.
What merits closer scrutiny is Warsh's stance at the press conference. He explicitly refused to provide forward guidance, stating that one should "not presuppose the outcome of meetings," and that unless a crisis occurs, markets should not overly rely on the Fed's forward guidance. At the same time, he announced that starting in 2027, the number of FOMC rate decision meetings would be reduced, with some meetings dedicated specifically to discussing long-term monetary policy strategy, during which no rate votes would be held and no policy statements would be issued. The policy statement upgraded its assessment of the economy from "moderate expansion" in September to "strong expansion," while maintaining the judgment that "inflation remains elevated." It removed the previous phrasing that "this action will support the timely return of inflation to the 2% objective," replacing it with "the accumulation of more information will help determine the appropriate stance."
The implication of this combination for gold is that short-term bearish pressure has become muted, but medium-term constraints have not been lifted. The decision not to hike was already known information, and gold's pre-decision decline had partially priced in this outcome, so no panic selling emerged after the decision landed. However, Warsh's refusal to offer any path guidance, combined with two committee members publicly advocating an immediate hike and traders still pricing an 80% probability of a December rate increase, means that the expectation of "higher for longer" rates has not been weakened. For gold, a non-yielding asset, with the 10-year Treasury yield holding above 5% and real rates remaining elevated, the core suppressing logic of holding costs may still persist.
Source: Wind, Everbright Futures Research Institute. Author: Shi Yueming. Professional Qualifications: F03097365. Trading Advisory Qualification: Z0017563. Disclaimer: The information in this report is sourced from publicly available materials. Our company makes no guarantees regarding the accuracy, reliability, or completeness of such information, nor does it guarantee that the information and suggestions contained herein will not change. We have strived to ensure the objectivity and fairness of the report's content, but the views, conclusions, and suggestions herein are for reference only and do not constitute recommendations for any specific products or businesses, nor operational basis or advice for related instruments. Investors bear full responsibility for any investment decisions made based on this information, and neither the company nor the author shall be held liable.
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