Forex

Dollar Strength Weighs on Gold Amid Fed Tightening Bets

Guavy AI Editorial Team Published September 23, 2026

Instruments

USD

Gold prices fell on Wednesday as investors bet on further Federal Reserve tightening, which lifted the US Dollar and put pressure on gold. The XAU/USD pair was trading around $4,305 in US hours, down 1.20% on the day.

The Fed's decision to raise rates by 25 bps last week took the federal funds rate to 3.75%-4.00%, and its projections point to one more hike this year, with a 53% probability of an October increase, according to the CME FedWatch Tool.

Despite lower oil prices, the US Dollar Index (DXY) stood near 100.96, up 0.40%, after climbing to a two-month high following last week's policy decision.

The technical outlook for gold is bearish, with the metal testing the lower Bollinger Band support at $4,304 and the 20-period SMA at $4,350 as first resistance.

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