Trump vs. Warsh: Rate Hike Decision Tonight Could Shake Gold Markets

Markets are expecting a rate hike from the Federal Reserve (Fed) tonight for the first time since 2023, with a probability of over 90%. However, President Trump does not want this to happen and has been putting pressure on Fed Chair Kevin Warsh.

The interest-rate decision will be announced at 20:00 Dutch time, along with updated forecasts and interest-rate projections. The real question is what Warsh says during his press conference at 20:30, as the explanation for the decision will matter more than the rate hike itself.

Gold has historically performed well when real interest rates are low, but if the Fed leaves the door open to further rate hikes, gold could become more vulnerable. Christopher Wong from OCBC said that if the important support level of $4,250 is breached, the gold price could fall further towards $4,000 per troy ounce.

Jesse Colombo expects a possible rebound in the gold price after the rate hike is announced, but if the Fed surprises by keeping rates unchanged, he predicts the gold price could rise towards $5,000 per troy ounce in the coming months, provided gold closes above $4,400.