Gold surges on expectations Fed will pause rate hikes through 2026

Gold rallied sharply on Monday as a fresh economist survey pointed to a prolonged pause in US interest rate increases, providing relief to investors seeking safe-haven assets. The Reuters poll of economists showed a broad consensus that the Federal Reserve will hold rates steady throughout 2026, offering clarity on the central bank's medium-term monetary policy stance.

The survey results offer a contrast to recent market chatter about potential rate hikes, which had gained traction amid persistent inflation readings. However, the Reuters data suggests that most professional forecasters remain unconvinced that inflationary pressures will force the Fed's hand in the coming years, strengthening the bull case for non-yielding assets like gold that benefit when interest rates remain low.

For Indian investors and importers, the gold price surge carries particular significance, as domestic gold costs are directly influenced by international spot prices. The strengthening outlook for stable US monetary policy could provide some predictability for Indian jewellers and consumers navigating gold purchases in the coming months.

Market analysts note that gold's 3% spike reflects a broader rebalancing of expectations around Fed policy. While some economists acknowledge risks from sticky inflation, the consensus view remains that rate hikes are not imminent, supporting gold's appeal as inflation insurance without the headwind of rising yields that typically pressures precious metals prices.