Gold Bulls Bet Big on $5,000 Price Target Amid Fed Hike

The Federal Reserve raised interest rates by 25 basis points on Wednesday, marking its first hike since 2023. The move lifted the federal funds target range to 3.75%-4.00%, a decision that was expected to weigh on gold prices.

However, despite gold's sharp pullback to around $399 per ounce, a large options trade placed earlier in the day suggests some investors remain bullish on the precious metal over the next several months.

The trade, worth more than $46.6 million, involved buying nearly 110,000 call spreads for the December 18, 2026, and January 15, 2027, expirations. The positioning suggests a sizable move higher into year-end and early 2027, with the key payoff range around $450-$485.

This price range is roughly equivalent to gold approaching $5,000 an ounce. If long-term yields stabilize and gold ETF inflows continue, the bullish thesis behind this trade could have room to play out.