Fed Hike Slams Gold Below $4,344 as Musalem Warns of Further Rate Increases

Spot gold remained near $4,344 an ounce on September 22, 2026, as the US Federal Reserve raised interest rates by 25 basis points and signaled further tightening. St. Louis Fed President Alberto Musalem stated that stronger demand and commodity-price pressures extending beyond oil could necessitate additional hikes, increasing gold's opportunity cost against yield-bearing assets.

The Fed's rate increase raised returns on cash and bonds, making gold a less attractive investment option. However, the strong demand for physical bullion may have offset some of this pressure. If the Fed pauses its tightening cycle in October, it could reduce the yield constraint and support further gains in gold prices.

The upcoming FOMC statement on October 28 will be crucial in determining the direction of interest rates and gold prices. A pause in rate hikes could open up a move above $4,400, while another hike would keep gold within its near-term range of $4,300 to $4,400.