Gold Prices Surge on Fed Rate Hike Expectations

Gold prices rose more than 1% on Thursday as investors digested the US Federal Reserve's interest rate hike and its signal that further policy tightening may follow.

The uptick in gold is also due to technical factors, with markets already largely priced in hawkish messaging, according to Kelvin Wong, senior market analyst at Oanda.

However, despite being considered an inflation hedge, higher rates reduce the appeal of gold by boosting the attractiveness of interest-bearing assets.

The Fed raised interest rates on Wednesday and flagged more hikes in the coming months, with 16 out of 18 policymakers anticipating at least one more quarter-percentage-point hike by the end of 2026.