Gold Rebounds After Fed Rate Hike
The price of gold rose after a three-day decline, following the Federal Reserve's decision to raise interest rates by a quarter percentage point. This was the first rate hike since 2023, and it had been widely anticipated.
Gold prices rose as much as 1.3% to near $4,320 an ounce before paring gains. Treasury yields cooled after spiking to their highest level since 2024, which helped support gold. However, Christopher Wong, a strategist at Oversea-Chinese Banking Corp., warned that elevated yields and a firmer US dollar may continue to cap gold's price in the near term.
The Fed's rate hike was largely priced in by markets, as rising energy prices added to inflationary pressure from the war in the Middle East. Core US inflation rose at a hotter-than-expected pace in August, and the central bank's median outlook for rates at the end of 2026 increased to 4.1%.