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Source: Newsmaker.id
Gold prices surged during Thursday's trading (Sept. 17) after facing pressure following the Federal Reserve's decision to raise interest rates. Spot gold (XAU/USD) traded around US$4,370 per troy ounce, up approximately 2.5% for the day. Gold's gains were driven by a weakening US dollar and a decline in Treasury yields as the oil price rally began to cool.
On Wednesday, the Federal Reserve raised interest rates for the first time since 2023, implementing a 25-basis-point hike to a range of 3.75%–4.00%. In its statement, the Fed noted that US economic activity remains solid, domestic consumption stays strong, and the unemployment rate has not seen significant change. However, the central bank emphasized that inflation remains high, necessitating continued tight monetary policy.
Following the announcement, gold came under pressure as the US dollar and Treasury yields rose. Prices even dipped to around US$4,235—the lowest level since August 7—after the market digested the Fed's latest interest rate projections and hawkish remarks from Fed Chair Kevin Warsh regarding persistent inflation risks.
The Fed's latest projections indicate that the majority of central bank officials still anticipate at least one additional rate hike before the end of the year. The benchmark interest rate is projected to settle around 4.1%, reflecting the Fed's openness to further tightening should inflationary pressures fail to subside.
However, the pressure on gold began to ease as the US dollar corrected from its highest level since July. The US Dollar Index fell to around 100.05 after previously touching 100.37, while the 10-year Treasury yield retreated from its weekly high. Meanwhile, Middle East tensions continue to support demand for gold as a safe-haven asset, following a renewed escalation in the conflict between Saudi Arabia and the Iran-backed Houthi group.
Newsmaker Analysis: Current gold price movements indicate the market is seeking a balance between the Federal Reserve's persistently hawkish stance and supportive factors such as a weakening dollar and geopolitical risks. In the short term, gold continues to face headwinds from potential further interest rate hikes and high Treasury yields. However, should dollar weakness persist and global uncertainty rise, there remains an opportunity for gold to sustain its upward momentum. (arl)
Source: Newsmaker.id