Gold Prices in Light of the Fed's Rate Hike and Global Developments
The US Federal Reserve's interest rate hike and movements in global bond and oil markets directly affected the course of gold prices.
The US Federal Reserve raising its policy rate by 25 basis points to the 3.75-4.00 percent range and developments in global markets caused a volatile week to be left behind in gold prices.
The Fed's Rate Hike and Spot Gold
The US Federal Reserve raised its policy rate by 25 basis points to the 3.75-4.00 percent range on Wednesday.
This increase was recorded as the first rate hike implemented since 2023.
Dollar Index and Bond Yields
Following the decision, the dollar and US Treasury bond yields registered increases.
The benchmark 10-year bond yield traded at the 5 percent level.
The Impact of the Drop in Oil Prices
The pressure on gold following the Fed's decision was partially offset by the decline in oil prices.
Saudi Arabia's pipeline repair efforts led to a pullback in oil prices.
Inflation Target and Interest Rate Expectations
Fed policymakers stated that they are determined to bring inflation back to the 2 percent target.
It was reported that median projections are at the 4.1 percent level for 2026 and 2027.
Market Pricing and Long-Term Supports
According to CME FedWatch Tool data, the possibility of a new rate hike in October is being priced in.
Central bank purchases and money flowing into ETF funds support the precious metal in the long term.
Current Gold Levels
Spot gold traded at the 4 thousand 370 dollar level as of September 19 at 10.05.
Spot gold, which started the day with an increase, tested above 4 thousand 390 dollars during the day.