- The Federal Reserve raised policy rates by a quarter point at its Sept 15-16 meeting, a unanimous vote and the central bank's first hike since 2023, aimed at cooling inflation that has not reached the 2% target in more than five years.
- Gold dropped from $4,340 to as low as $4,260/oz during the FOMC announcement and press conference, a selloff tied to the Summary of Economic Projections showing elevated inflation expectations and a consensus for one more 25bp hike before end-2026.
- Gold rebounded to about $4,360/oz as crude oil slid to $100 and then below it, easing US Treasury yields after the 10-year Note had surpassed 5.0%; bullion traded near $4,375/oz into the following week.
- The Bank of Japan raised its benchmark rate to 1.25%, the highest BoJ policy rate since 1995, narrowing the US-Japan rate gap and adding a tailwind for gold into Friday's session.
- With gold above $4,000/oz, the industry bottleneck has shifted from deposit discovery to processing capacity, pushing operators such as Lake Victoria Gold toward toll-milling arrangements instead of building their own plants.
- The macro calendar is light next week, leaving public comments from FOMC participants and moves in oil, Treasury yields and the dollar as the key catalysts for gold.
Quotes
“Gold was steady as traders weighed the risk of persistent inflation and the path for interest rates after the Federal Reserve's first hike since 2023.”
“Gold took a more volatile path than expected but rebounded from a post-FOMC low near $4,260/oz to trade just above $4,350/oz shortly after the US market open on Friday, putting the yellow metal in position for a moderate weekly gain.”
“With gold prices above $4,000 per ounce, the industry's primary bottleneck has shifted from deposit discovery to processing capacity”