Fed rate hike to 3.75%-4.00% pressures gold, but de-dollarization supports long-term outlook
On September 17, the Federal Reserve raised its target range by 25 basis points to 3.75%-4.00%, ending the easing cycle that began in September 2024. Gold prices briefly surged then fell back to around $4,250 per ounce. Analysts expect short-term range-bound trading due to hawkish expectations, but note structural support from central bank gold purchases and ETF inflows. Long-term, de-dollarization and gold's credit attributes are seen as key supports.
IllustrationEditorial responsibility
- No named human review is recorded for this page.
- Reports are grouped by semantic similarity and deterministic rules. Language models may assist titles, summaries, translation and cross-source analysis; the page reads the event directly, while its address stays stable when the title changes.
- Summary covers the current reports
Cross-source coverage
Reporting timeline
Gold Wavers After Fed Rate Hike; De-dollarization Supports Long-Term Outlook
Following the Federal Reserve's decision to raise the target range by 25 basis points to 3.75%-4.00% on September 17, gold prices briefly surged before retreating to around $4,250 per ounce. The Fed signaled a path of one more rate hike this year, maintaining rates through 2027, and a slow easing beginning in 2028. Despite higher holding costs, the rate hike did not trigger significant outflows from gold funds; domestic and overseas ETFs, as well as leveraged funds, showed buying interest. Holdings rose to 1,056.836 tons by September 23. Multiple institutions forecast sideways trading for gold before the October Fed meeting. CITIC Futures noted that rate hike expectations are suppressing prices in the short term, leading to range-bound trading. A chief macro analyst suggested that while the upward slope of U.S. Treasury yields may slow, structural demand from global central bank purchases and net ETF inflows will provide a floor, resulting in weak, volatile gold prices. In the long term, the core support for gold remains its safe-haven attribute amid de-dollarization. Since 2022, global central banks have purchased over 1,000 tons of gold annually, and a World Gold Council survey found 84% of central banks expect to increase gold reserves over the next five years. Historically, periods of rising EFFR and gold prices have occurred; if U.S. credit and economic problems worsen, pushing inflation higher, gold could rise alongside interest rates even during a hiking cycle.
Read sourceGold price shifts after Fed rate hike; analysts see short-term weakness but long-term support from de-dollarization
Following the Federal Reserve's September 17 rate hike of 25 basis points to 3.75%-4.00%, which ended a rate-cutting cycle that began in September 2024, London spot gold briefly rose then fell back to around $4,250 per ounce. Analysts cited by the article expect short-term bearish pressure from hawkish rate expectations, with gold likely to trade in a narrow range until the next Fed meeting in October. However, multiple institutions argue that rate hikes do not necessarily mean a gold bear market. CITIC Futures noted the rate hike was priced in, limiting further downside. Oriental Jincheng's chief analyst Wang Qing pointed to structural demand from central bank gold purchases and ETF inflows as providing a floor. Long-term, analysts at Founder Securities and others highlight de-dollarization and gold's credit attributes as key supports, noting that in past high-inflation periods like 1972-1974 and 2004-2007, gold rose alongside interest rates. Global central bank buying has exceeded 1,000 tonnes annually since 2022, with 84% of central banks surveyed by the World Gold Council expecting to increase reserves over five years.
Read sourceGold Price in Turmoil: Rate Hike Equals Bear Market? Analysts Weigh Future Path
Following the Federal Reserve's September 17 rate hike of 25 basis points to 3.75%-4.00%, ending the easing cycle that began in September 2024, gold prices briefly surged then fell back to around $4,250 per ounce. Analysts cited by the article, including from CITIC Futures and Dongfang Jincheng, expect short-term weak and volatile gold prices due to hawkish expectations, but note structural support from central bank gold purchases and ETF inflows. The article highlights that the rate hike did not trigger significant outflows from gold ETFs, with SPDR Gold Trust holdings increasing over 10 tons from a late-August low. Long-term, institutions like Founder Securities argue that rate hikes do not necessarily mean a gold bear market, pointing to historical periods of rising rates and gold prices during high inflation. The core bullish thesis remains de-dollarization and gold's credit attributes, with the World Gold Survey showing 84% of central banks expect to increase gold reserves over the next five years.
Read sourceShow 2 older updatesHide older updates
Gold Price Shifts: Rate Hike Does Not Equal Bear Market; Analysts See Weak Oscillation Ahead
Following the Federal Reserve's September 17 rate hike of 25 basis points to 3.75%-4.00%, ending the easing cycle that began in September 2024, London spot gold briefly rose then fell back to around $4,250 per ounce. The article analyzes that while hawkish expectations may drive short-term weak oscillation in gold prices, structural demand from central bank gold purchases and de-dollarization trends provide support. Analysts from CITIC Futures and东方金诚 (Golden Credit Rating) note that the rate hike's 'bad news out' effect is at play, and with limited room for further real interest rate rises, gold is expected to trade sideways until the October FOMC meeting. Long-term, institutions argue that gold's core support remains its credit attribute amid de-dollarization, citing record central bank buying since 2022.方正证券 (Founder Securities) points to historical periods (1972-1974, 1977-1980, 2004-2007) when gold and rates rose together during persistent inflation, suggesting gold could shine again if inflation proves hard to contain despite rate hikes.
Read sourceGold Price Shifts After Fed Rate Hike; Analysts Debate Bull vs Bear Outlook
Following the Federal Reserve's September 17 decision to raise the federal funds rate by 25 basis points to 3.75%-4.00%, ending the easing cycle that began in September 2024, gold prices briefly rose then fell back to around $4,250 per ounce. The article notes that while the rate hike increases the holding cost of gold, it has not triggered large outflows from exchange-traded funds (ETFs) or domestic leveraged funds, with SPDR Gold Trust holdings rising over 10 tons from a late-August low. Multiple institutions offer near-term and long-term outlooks. CITIC Futures expects range-bound trading until the October Fed meeting, as hawkish expectations continue to pressure prices. Dongfang Jincheng chief analyst Wang Qing sees a tug-of-war between hawkish rate expectations and structural demand from central bank buying and ETF inflows, leading to weak, volatile gold prices. Longer-term, analysts at Founder Securities argue that a rate hike does not necessarily mean a bear market for gold, citing historical periods (1972-1974, 1977-1980, 2004-2007) when rates and gold prices rose together amid persistent inflation. They and others highlight de-dollarization-driven central bank gold purchases—over 1,000 tonnes annually since 2022—as a key support, with 84% of central banks surveyed by the World Gold Council expecting to increase reserves over five years. The article concludes that if U.S. credit and economic problems worsen alongside deglobalization, gold could rise even during a rate-hiking cycle.
Read source