Fed Rate Hike Sparks Gold Price Drop

The US Federal Reserve's (Fed) decision to raise interest rates by 0.25 percentage points has sent shockwaves through the gold and silver markets.

The spot price of gold fell as low as $4,261.80 per ounce on September 16, down 0.72%, while silver prices dropped 1.16% to $62.82 per ounce before recovering slightly.

Fed Chairman Kevin Warsh stated that inflation remains high and the US economy has enough capacity to absorb tighter monetary conditions, suggesting that interest rates may continue to rise.

The Fed's Summary of Economic Forecasts (SEP) indicates that many officials believe monetary policy may need to tighten further, with most policymakers predicting at least one more interest rate hike before the end of 2026.