By Ben McGregor
Educational content only, not investment advice. Mining stocks are high risk.
The Federal Reserve held its federal funds rate target range at 3.75 percent to 4 percent on October 28, 2026, in a 10-2 vote, according to the official FOMC statement. Spot gold traded near $4,035 an ounce shortly after the announcement, down about 0.6 percent on the session, while silver held around $54, based on contemporaneous market reports. The precious metals forecast for the rest of 2026 now hinges on whether the Fed signals further tightening in December or leaves the door open for a pause, because higher rates raise the opportunity cost of holding gold and silver that pay no interest.
The Federal Open Market Committee voted to keep the target range unchanged after raising rates by a quarter point in September. Economic activity was described as expanding at a “strong pace,” with resilient domestic spending, strong productivity growth, and job gains that have kept pace with the workforce. Inflation remains elevated, and the statement said the accumulation of more information will help determine the policy stance needed to return inflation to the 2 percent goal. Two members, Lisa Cook and Beth Hammack, dissented in favor of a 25-basis-point increase. Chair Kevin Warsh’s press conference followed at 2:30 p.m. Eastern, and markets focused on any language about the December meeting rather than the hold itself, which had been widely expected.
Market pricing ahead of the decision assigned high odds to a hold and roughly 75 to 84 percent odds to another hike in December, depending on the snapshot from the CME FedWatch tool. The October meeting did not include updated economic projections. Those come at the December 8-9 meeting. Higher interest rates can support the US dollar and Treasury yields, both of which have historically pressured gold and silver prices.
Gold slipped toward $4,035 after the statement, according to Kitco reporting on October 28. Earlier in the day, spot gold had traded closer to $4,050-$4,065 in some sessions after a rebound the prior day. Silver traded near $53.80 to $54.40 across different feeds on the same day, down modestly on the session in several reports. Both metals remain well below their January 2026 highs. Gold’s closing high that month was near $5,415, and silver’s 52-week high reached above $115 in some data series. The gold-silver ratio, which measures how many ounces of silver one ounce of gold can buy, has hovered in the mid-70s recently.
Thin liquidity and open questions about the rate path can amplify moves. A hold removes one source of immediate pressure, but the two dissents and elevated December hike odds leave room for further volatility if incoming data keep inflation concerns alive. Oil prices and geopolitical developments have also fed into inflation expectations, which in turn affect rate pricing and precious metals.
Near-term views differ. Sucden Financial said in a report published October 28 that gold could test support around $3,900 ahead of the December Fed meeting, while silver could fall toward $50 to $53 as tighter monetary conditions weigh on investment demand and industrial demand softens. The firm still expects both metals to stabilize in early 2027 once the Fed approaches the end of its tightening cycle, with gold recovering toward $4,200-$4,300 and silver toward $57-$60 by mid-January under that scenario. A Reuters poll of 30 analysts and traders conducted in recent weeks produced a median gold forecast of $4,495 an ounce for 2026 and $4,650 for 2027. For silver the same poll showed averages of $70.30 in 2026 and $66.75 in 2027. Those longer-term figures sit above current prices, which means the forecasts imply recovery later even if near-term pressure persists.
Other research groups, including Metals Focus, have published higher 2027 averages in the $5,000-plus range for gold and the $80-plus range for silver, citing structural support from central-bank buying and the view that aggressive further tightening would eventually slow the economy and reinforce demand for non-yielding hedges. The gap between near-term caution and longer-term optimism is the central feature of the current precious metals forecast. Real yields (nominal yields minus expected inflation) remain a key variable. When they rise, the relative attractiveness of gold and silver can fall.
Canadian-listed producers and streamers often move with gold and silver prices because higher bullion prices generally improve margins while lower prices can compress them. Agnico Eagle Mines (TSX: AEM), Kinross Gold (TSX: K), and Wheaton Precious Metals (TSX: WPM) are large names that many investors track alongside the metal. Silver-focused producers such as Pan American Silver (TSX: PAAS) and First Majestic Silver (TSX: AG) are more sensitive to silver’s greater volatility, because silver has both precious-metal and industrial demand. A period of gold near $4,000 and silver near $54 can keep share-price swings elevated even when company-specific production remains on track.
One real risk already visible for some operators is cost inflation or operational disruptions that raise all-in sustaining costs (AISC, the full cost to produce an ounce including sustaining capital). Kinross, for example, said on September 23, 2026, that it expected 2026 and 2027 production 2 to 3 percent below the low end of prior guidance because of extreme weather and operational issues at two assets. Royalty and streaming companies are less exposed to mine-site costs but still depend on the gold and silver price for revenue. Guidance (a company’s own expected production range) can become harder to meet if realized prices stay lower for longer than the assumptions used when guidance was set.
A clearer signal that the Fed is approaching the end of rate increases would reduce the opportunity cost of holding gold and silver. Softening inflation data, particularly the September PCE release due the day after the Fed decision, could lower December hike odds and ease pressure on yields and the dollar. Central-bank purchases and physical demand in Asia have provided support in prior periods even when Western investment demand has been softer. For silver, any stabilization in industrial demand (electronics, solar, and automotive) alongside investment flows could help, though current forecasts note that solar thrifting and substitution remain headwinds.
Geopolitical developments that raise risk aversion can also lift both metals, but higher oil prices linked to those same developments can work in the opposite direction by supporting inflation and rate expectations. The net effect is not automatic. Investors watching the gold price outlook and silver price outlook will be looking for confirmation that yields have peaked or that the dollar has stopped strengthening before sustained rebounds become more likely.
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Ben McGregor authors the Weekly Roundup at CanadianMiningReport.com, providing sharp analysis of the metals and mining sector. With a talent for spotting trends, Ben distills complex market shifts into clear, engaging insights on TSXV junior miners. His weekly updates cover gold, copper, uranium, and more, blending data-driven perspectives with a knack for identifying opportunities. A vital resource for investors, Ben’s work navigates the dynamic junior mining landscape with precision.