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Gold prices rebounded on Thursday, climbing back above the $4,300-an-ounce level as investors assessed the Federal Reserve’s first interest rate hike in three years and its signal that further monetary tightening could come before the end of 2026.
Spot gold strengthened despite the Fed’s hawkish outlook, helped by a modest pullback in the U.S. dollar. At 01:42 ET (05:42 GMT), XAU/USD rose 0.7% to $4,295.18 an ounce, while gold futures fell 1.2% to $4,333.09. Silver gained 1.1% to $63.68 an ounce, and platinum advanced 1.5% to $1,781.83. The U.S. Dollar Index edged lower to 100.28.
The Federal Open Market Committee unanimously voted to raise the federal funds rate by 25 basis points on Wednesday, marking the first increase in three years. The decision was broadly anticipated by financial markets.
However, the Fed’s updated projections pointed toward additional tightening. Policymakers lifted their median forecast for the policy rate at the end of 2026 to 4.1%, compared with an earlier projection of 3.8%, suggesting another rate increase remains possible this year.
Higher interest rates generally create pressure for gold because the precious metal offers no yield, while a stronger U.S. dollar makes dollar-denominated bullion more expensive for overseas buyers.
IG senior market analyst Tony Sycamore said expectations for another Fed hike in 2026, followed by an additional 50 basis points of tightening during the first half of 2027, could continue weighing on gold prices.
From a technical perspective, Sycamore said gold would need to recover above its 200-day moving average near $4,539 to indicate that the correction from its $4,697 peak has ended and the broader bullish trend has resumed.
Until that happens, gold could retreat toward $4,200, with $4,000 representing another important support level.
Fed Chair Kevin Warsh also emphasized persistent inflation risks, noting that many categories of goods and services continue to record annualized price increases above 3% over both six- and 12-month periods.
