Fed Rate Hike Sparks Mixed Reaction in Gold, Silver Prices

The US Federal Reserve raised its benchmark interest rate by 25 basis points to 4%, prompting a mixed reaction in gold and silver prices.

Gold prices fell 0.26% to $4,388.20 an ounce on the COMEX, while silver prices rose 0.18% to $66.215 an ounce.

Ruchit Thakur, Market Analyst at VT Markets, explained that higher US interest rates and Treasury yields weigh on non-yielding assets like gold and silver, making them more expensive for overseas buyers due to a stronger dollar.

However, geopolitical uncertainty remains a major driver of safe-haven demand for precious metals, with continued concerns over growth, trade, fiscal policy, and geopolitics potentially weakening confidence in risk assets and increasing demand for gold and silver.