Gold Trims Gains After Fed Raises Interest Rates

Gold prices pared some of their gains during Wednesday's trading (Sept. 16) after the Federal Reserve raised interest rates and signaled that borrowing costs could rise further in the coming months.

Spot gold remained up approximately 0.9% at US$4,330.19 per troy ounce. Earlier, prices had surged by as much as 1.6% to around US$4,365.57 per troy ounce.

The Fed's rate hike exerts pressure on gold by boosting the appeal of interest-bearing assets while increasing the opportunity cost of holding the non-yielding precious metal.

Newsmaker Analysis: Gold's reaction indicates that the market is still digesting the direction of Fed policy following the rate hike. If the central bank reaffirms the likelihood of further increases, gold could face continued pressure, even though it remains supported by safe-haven demand.

Source: Newsmaker.id