Gold Holds Firm as Investors Focus on 2026 Policy Outlook

Source: Coindoo Original Title: Gold Holds Firm as Investors Focus on 2026 Policy Outlook Original Link:

Gold’s advance has stalled — not because traders doubt this week’s rate cut, but because they now care more about what comes after it.

The metal is hovering comfortably above $4,200 an ounce as investors try to map out how much easing the Federal Reserve will deliver next year and beyond.

Key Takeaways

• Gold is holding above $4,200 as attention shifts from this week’s Fed cut to future policy moves.
• The metal is set for its strongest annual performance in decades thanks to central-bank buying and ETF demand.
• Markets now expect fewer rate cuts through 2026, giving yields a lift.
• Analysts warn gold could dip below $4,000 if easing momentum fades.

Instead of obsessing over Wednesday’s likely quarter-point cut, markets are trimming expectations for longer-term easing. Just days ago, swap markets penciled in three cuts by late 2026; now consensus leans toward two. That moderation has firmed yields, with 10-year Treasuries pushing to levels last seen more than two months ago.

Kevin Hassett — a leading contender to replace Jerome Powell — added uncertainty by arguing that committing to a rate path months in advance would be irresponsible.

A Standout Year for the Yellow Metal

Despite recent consolidation, gold has already delivered its strongest annual surge in decades, clocking a roughly 60% gain. The rally has been underpinned by sovereign buying and persistent ETF inflows, helping the metal shrug off periods of profit-taking.

Pacific Investment Management Co. sees the rally supported by a remarkable trend: some central banks now own more gold than US Treasuries, a symbolic reversal of global confidence patterns.

Analysts at BMI caution that if investors sense the Fed is cooling its dovish stance, momentum could fade. They warn that bullion could slip back under the $4,000 mark if the easing cycle loses steam — especially since gold yields nothing when interest rates rise.

A Mixed Session Across Metals

By mid-morning in London, spot gold was modestly higher, silver clawed back early weakness to trade near $58.6, while platinum and palladium slipped. The dollar was largely unchanged — offering no major catalyst either way.

Gold, it seems, is waiting for direction — not from this week’s cut, but from the narrative that follows it.