Gold falls after the first Fed rate hike in 3 years
Kyiv • UNN
The Fed raised its rate to 3.75–4% and allowed for another hike. Gold fell to around $4,270 per ounce amid a strengthening dollar.
Gold prices continued to decline after the U.S. Federal Reserve raised its interest rate for the first time in three years and signaled possible further monetary policy tightening. Gold is trading near $4,270 an ounce after falling about 2% over the previous three sessions, Bloomberg reports, according to UNN.
Details
The Federal Open Market Committee unanimously raised the target rate range by 0.25 percentage points to 3.75–4%. The Fed’s new projections put the rate at 4.1% at the end of 2026, indicating the possibility of another hike by the end of the year.
Markets interpreted the Fed’s decision as a "hawkish" signal. The dollar strengthened after the decision was announced, while high interest rates put additional pressure on gold because the precious metal does not generate interest income.
The Fed continues its fight against inflation
The Fed explained its decision by saying that inflation in the United States remains elevated. The regulator said that raising the rate should help inflation return to the 2% target more quickly.
On the morning of September 17, spot gold was trading near $4,274 an ounce. Silver was priced at about $63.28, while platinum and palladium also showed slight increases.