Gold and Silver Prices Rebound After Fed Rate Hike Decision

 

Gold and Silver Rebound After Fed Hikes Interest Rates

(Sept. 17th, 2026) – Gold and silver prices rebounded on Thursday, staging a moderate rally after retreating on Thursday following the Federal Reserve’s vote to raise interest rates for the first time since 2023. The spot price of gold gained more than $80 per troy ounce on Thursday, settling near $4,350 per troy ounce as markets closed for the day. Silver prices saw a larger percentage gain, adding more than $2.20/ozt to set a weekly high before market close. The price action favored silver, driving the gold-silver ratio lower.

The Federal Reserve voted unanimously on Wednesday to raise the federal interest rate by 25 basis points. This fell in line with market expectations; sticky inflation and a relatively strong job market reading had made a rate hike at the FOMC’s September meeting highly likely. Precious metal prices retreated marginally throughout the day, but the larger market reaction was likely already priced in before Warsh spoke in the post-meeting press conference.

According to the FOMC’s decision statement, sticky inflation numbers led to the decision to cut rates for the first time since 2023.

Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.

During a press conference following the decision, Fed Chair Kevin Warsh reiterated that the hike was intended to help curb inflation, which is one of the FOMC’s two objectives. “Our predominant focus is on the price stability side of our mandate,” Warsh said. The economist, who replaced Jerome Powell as Chair of the Federal Reserve in May, told reporters that the FOMC remains focused primarily on price stability.

Price stability is foundational to economic growth, and I think we took an important step today to deliver it.

U.S. President Donald Trump has repeatedly asked the Federal Reserve to cut interest rates. Following the rate hike vote, the American leader told reporters that he disagreed with the FOMC’s decision. Trump criticized former Federal Reserve chair Jerome Powell several times in 2025 and early 2026 for failing to cut interest rates. Warsh was nominated by the president to become the next Chair of the Federal Reserve, a position that he took over in May of this year.

It’s too high an interest rate […] We should be paying the lowest interest rate anywhere in the world, because we have the strongest credit […] Interest rates are too high.

Interest rate speculation drove precious metal prices throughout 2024 and 2025. Demand for safe haven assets like gold and silver has historically thrived when interest rates are declining, and rising rates can be a bearish signal in the precious metals market. Prices rebounded on Thursday after a moderate retreat Wednesday, but markets likely already priced in the probability of a rate hike before the Fed’s Wednesday meeting.

Now, speculation turns to the final two Fed meetings of the year. It is unclear at this point whether the Fed will vote to raise rates again when it meets next on October 28th. CME FedWatch projects a 53.1% probability that the FOMC will add another 25 basis points to the federal interest rate, along with a 46.9% likelihood that rates will be unchanged heading into November. By the end of 2026, CME FedWatch projects an 87% probability that the FOMC will raise rates again, with a 38.4% read that rates will be 50 basis points higher by 2027.

A couple of economic reports could drive market speculation next week. On Tuesday, traders will hear Thomas Barkin, president of the Federal Reserve Bank of Richmond, during a speech to Baltimore’s CFA Society. The U.S. flash manufacturing PMI report is due for release next Wednesday, and Friday will yield a fresh consumer sentiment reading from the University of Michigan.

As has often been the case this year, news out of the US-Iran conflict could drive acute demand for safe haven assets. These reactive price swings have been highly unpredictable throughout 2026. While gold typically gains during periods of heightened geopolitical tension and conflict, fears that war with Iran may lead to higher interest rates domestically actually drove gold lower when the conflict initially began. Still, traders are likely paying close attention to any major news coming out of the region, particularly where the Strait of Hormuz is concerned.