The primary headwind for gold remains monetary policy. US Personal Consumption Expenditures (PCE) price index data for September showed inflation accelerating to 3.6% year-on-year from 3.4% in August, with core inflation rising to 3.1%. The US economy expanded at a 3.4% annualized rate in the third quarter. Consequently, markets currently price in a 76% probability of a 25 basis point rate increase in December, according to CME Group data. Heraeus analysts noted that these figures pose a substantial challenge for the yellow metal, though they suggested the dip below $4,000 could attract buyers, similar to the demand surge from China seen in June and July.
In the silver market, India has issued permits for approximately 6,500 tonnes of silver imports over the next six months. This allocation, equivalent to about 209 million ounces, represents nearly 90% of the 232 million ounces India imported during all of 2025. The move is expected to alleviate physical tightness, as dealer premiums over official domestic prices fell to $0.45 per ounce on October 22, down from $2.50 a week earlier and $6.50 in July. Spot silver traded at $50.987 per ounce on Monday, gaining 3.77% on the daily chart.
Indian silver imports had previously contracted sharply, falling to roughly one million ounces per month in May and June following the introduction of licensing requirements. Although flows recovered to 15.5 million ounces in August and 11.0 million ounces in September, total imports for the first nine months of 2026 stood at roughly 87 million ounces, a 32% decline year-on-year. The new permits cover a volume almost two-and-a-half times the amount imported so far this year, though analysts caution that much of this allocation may go unused if domestic demand remains weak.
Timing is critical for these imports, as demand traditionally rises leading up to the Diwali festival, scheduled for November 8. Last year, imports surged to 55.9 million ounces in October ahead of the holiday. Meanwhile, mining major Newmont reported stable third-quarter gold production of 1.30 million ounces, up 1% quarter-on-quarter but 8% below the same period last year. Newmont expects its fourth quarter to be the strongest of the year at approximately 1.37 million ounces, keeping full-year output on track for its 5.26 million ounce guidance.
The next key data points for precious metals markets include the People’s Bank of China’s October reserve data, due in early November, which will indicate whether official gold buying has accelerated. Additionally, the US Federal Reserve’s December meeting will determine if the anticipated rate hike materializes. For silver, physical market flows in the coming weeks will determine the extent to which the new Indian import permits translate into actual consumption.
