Gold Jumps 3% as Reuters Poll Shows Economists Backing Fed Rate Pause Through 2026

The Quick Take

• Gold surged 3% after a Reuters poll showed most economists expect the Federal Reserve to hold rates through 2026.
• The poll contrasted with rising market bets on a rate hike as sticky inflation data continues to pressure the Fed.
• Gold's 3% gain reflects safe-haven demand as oil-driven inflation fears combine with a weaker rate-hike probability.

Gold prices spiked 3% after a Reuters economist survey reinforced expectations that the Federal Reserve will hold interest rates through 2026 despite sticky inflation and rising market bets on a hike. The combination of polling consensus for a pause and physical safe-haven demand driven by $100 oil and Middle East tensions created a powerful positive catalyst for gold, which benefits from both lower real rates and geopolitical uncertainty.

The divergence between the Reuters poll (hold) and market-implied probabilities (rising hike bets) reflects genuine uncertainty about the Fed's reaction function in an oil-shock environment. Gold is effectively arbitraging this uncertainty — if the Fed holds, gold benefits from lower real rates; if oil-driven inflation forces a hike, gold benefits from safe-haven flight as equities reprice. This binary upside dynamic is attracting tactical positioning.

For Indian gold markets — where the country is the world's second-largest consumer — a 3% global price spike immediately filters through to retail gold prices. The RBI faces a compounding challenge: rising oil-driven inflation AND gold import demand both widen the current account deficit simultaneously. Watch India's April gold import data and any RBI commentary on gold loan regulations, which affect the transmission of gold price movements to domestic credit conditions.

Synthesized from 1 source.