Fed Rate Hike Hits Gold Hard

Gold prices plummeted by as much as 1.3% after the US Federal Reserve raised interest rates for the first time in three years, signaling another rate increase is likely by the end of 2026.

The Fed's dot plot for rate projections showed a clear indication of a hawkish stance, with Treasury yields falling along the curve and the US dollar jumping by 0.6%.

According to Elias Haddad, global head of markets strategy at Brown Brothers Harriman, 'the US central bank's hawkish hike hits gold through a stronger US dollar and higher real yields.'