Gold Defies Rate Hike Expectations, Holds Firm Above $4,300
Despite market expectations that rate hikes would pressure gold prices, the precious metal has held firm above $4,300. This unexpected resilience comes as the Federal Reserve raised rates for the first time since 2023 and the Bank of Japan hit a 31-year policy peak.
The price anomaly lies in the divergence between spot and futures gold prices. While U.S. gold futures dipped 0.3% to $4,385.70, spot gold rose 0.2% to $4,346.65 per ounce.
Three structural forces explain why gold's short-term sensitivity does not run through headline rates alone: it responds to real yields and the dollar, the Fed's projected path is shallower and slower than prior cycles, and institutional and official demand provides a floor that rate-sensitivity models do not capture.