Gold Trapped Below $4,400 as Fed Hike Looms

Gold prices have been stuck below $4,400 for weeks, despite some positive indicators. The Federal Reserve's recent rate hike and falling oil prices have not been enough to propel gold higher. However, long-term Treasury yields have retreated after briefly breaking above 5%, reducing pressure on the metal.

The Fed raised its target range by 25 basis points to 3.75%-4% last week, signaling at least one additional increase in 2026. This has created an awkward backdrop for bullion, as higher interest rates increase the opportunity cost of holding an asset that pays no income.

Konstantinos Chrysikos of Kudo.com told The Wall Street Journal that gold could remain constrained while investors expect further tightening. However, Goldman Sachs analysts expect Fed tightening to slow rather than derail gold's longer-term advance.