Gold Slumps as Fed Hike Ignites Hawkish Sentiment

The Federal Reserve's latest rate hike has sent gold prices plummeting by over 1% to around $4,240. The Fed raised its target rate by 25 basis points to the 3.75%, 4.00% range, with a unanimous decision from all 12 members of the Federal Open Market Committee (FOMC). The move was expected, but its hawkish tone has put pressure on gold prices.

The Fed's signal that inflation remains elevated and that further tightening is possible sent a strong headwind to gold, which had been trading near $4,300 before the decision. The precious metal is now facing a critical technical test as it struggles to hold above key support levels.

However, with macro uncertainties surrounding fiscal pressures and economic growth lingering, gold's medium-term outlook remains uncertain. A collapse toward $4,200 or even $4,000 followed by a complete reversal remains possible if buyers defend the current support zone and reclaim $4,400.