Gold Surges as Dollar Gains Fizzle Amid Fed Rate Hike

Gold prices surged more than 2% on Thursday, September 17, following the Federal Reserve's decision to raise interest rates. The US dollar gave back some of its gains after reaching a high of 100.37 since July 31, currently trading around 100.15.

The spot gold price traded at $4,370 per ounce, with US Treasury yields falling below their recent peaks due to a cooling in crude oil prices. However, the possibility of further rate hikes by the Fed still constrains gold's upside potential.

Following the release of the resolution, Federal Reserve Chair Jerome Powell signaled that inflation remains too high and that this rate increase is intended to reverse 'some of the accommodative policy.'

The updated dot plot shows that 16 out of 18 policymakers expect at least one additional 25-basis-point rate hike by year-end, with the median projection for the policy rate standing at 4.1%.