Gold Extends Weakness Near $4,270 as Fed Signals More Rate Hikes

Gold remained under pressure after the Federal Reserve raised interest rates for the first time in three years and signaled it may lift them again later this year.

According to Bloomberg, spot gold rose 0.2% to $4,273.82 an ounce as of 7:52 a.m. in Singapore on September 16. Even so, the metal has fallen about 2% over the past three trading sessions.

The Fed unanimously decided at its Federal Open Market Committee meeting a day earlier to raise its benchmark rate by 0.25 percentage point. It was the central bank's first rate increase in three years.

Markets focused less on the rate move itself than on the Fed's willingness to keep the door open to further tightening. The median year-end policy-rate projection from Fed officials rose to 4.1% from 3.8%, signaling another increase could come before the end of the year.

Investors took that as a hawkish signal. The dollar strengthened, while gold, which does not pay interest, typically becomes less attractive when rates rise.

Fed Chair Kevin Warsh also emphasized inflation risks at a press conference after the decision. Prices for a substantial share of goods and services have been rising at annualized rates above 3% over both the past six months and the past 12 months, he said.

Recent U.S. inflation data also reinforced the case for tighter policy. Core inflation in August rose faster than expected, heightening concern that price pressures are spreading broadly beyond tariffs and higher energy costs linked to the war in Iran.

Oil prices, meanwhile, fell on expectations that supply disruptions may ease. Saudi Arabia is reportedly working to restore about half of the transport capacity of the East-West pipeline damaged in the attack within days, with full normalization targeted in about six weeks.

Spot silver rose 0.5% to $63.28 an ounce, while platinum and palladium also edged higher.