Gold Shrugs Off the Fed's First Rate Hike Since 2023
September 19, 2026Gold ended the week higher, its first weekly gain after three straight losses, even though the Fed raised interest rates for the first time since 2023. Gold had climbed more than 1% to about US$4,366 ahead of Wednesday's decision, then fell to around US$4,240, a six-week low, once the Fed signalled more hikes. That is a swing of more than US$100 in a few hours. By Friday it was back near US$4,390. Silver led the bounce, rising about 3% on Thursday and another 2–3% on Friday to roughly US$67.
Oil did the work, not the Fed. Crude fell for three sessions as Saudi Arabia moved to restore its East-West pipeline and shipped more crude out through Oman. US 10-year yields slid back from above 5% to about 4.93%. Lower oil eased inflation fears, which took pressure off gold, and short covering added to the move as traders closed out bets against it.
For ASX gold miners, oil matters almost as much as gold, because fuel and energy costs rise with it. West Texas crude still sits around US$100, up more than 15% in September, while gold has drifted lower over the month. An ounce of gold now buys about 44 barrels of oil, and that ratio has been sliding. The supply risk hasn't gone away either: the Houthis now control the Bab el-Mandeb strait, Hormuz shipping is still disrupted, and Saudi Arabia's pipeline is only partly back. ASX gold stocks were among the strongest sectors this week. Margins are still wide, but higher fuel costs will start to show up in producers' costs if oil stays here.
The long-term case for gold hasn't changed. Central bank buying and reserve diversification run on multi-year timelines that one Fed meeting doesn't reset. Gold's ability to shrug off a hawkish hike is encouraging for long-term holders, though it had help from falling oil. The next test is the 27–28 October meeting, when officials could deliver the second hike they are signalling.
Brian contributes his insights on precious metals and mining stocks via free and paid newsletters with independent publisher, Fat Tail Investment Research. You can learn about his work by visiting www.daily.fattail.com.au. Fat Tail Investment Research is part of The Agora, a renowned international financial solutions publisher.
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