Gold Rises Amid Higher Borrowing Costs and Strong Retail Sales

Gold prices ticked up by 0.5% after hitting a near six-week low, despite the Federal Reserve's decision to raise interest rates and signal further tightening ahead.

The unexpected move in gold prices suggests that traders are trying to balance short-term bargain hunting with the prospect of higher borrowing costs.

Fresh US data showed August retail sales strengthened, which makes it harder for markets to price in a quick pivot to rate cuts. This typically would be a friendlier setup for bullion.

The Fed's message matters for gold because it doesn't pay interest, so when yields rise, holding it has a bigger 'opportunity cost' versus bonds or cash.