GLOBAL BULLION TRACKER — METALS BRIEF

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The Federal Reserve raised rates last week — and gold and silver still held up well.

At first glance, that seems contradictory. Higher rates usually pressure precious metals by lifting bond yields and increasing the opportunity cost of holding non-yielding assets.

But last week’s reaction was driven by more than the rate hike itself.

The Fed raised the federal-funds target range by 25 basis points to 3.75%–4.00% on September 16. Markets had largely expected the move, meaning the bigger question immediately became what happens next.

Markets had spent days positioning for a September increase.

That matters because once a heavily anticipated event actually occurs, traders often unwind positions established ahead of it. The Fed delivered the expected quarter-point hike without an even larger surprise, allowing some of the pressure on precious metals to ease.

Gold’s reaction is therefore less mysterious than the headline suggests.

The market was not suddenly deciding that higher rates are good for gold. It was reacting to the fact that the expected hike was now behind it.

Another major factor was oil.

Brent crude fell roughly 2% Monday to around $102 per barrel, after recently trading above $109. Lower energy prices eased some near-term inflation fears and helped support a rally in bonds, pushing Treasury yields lower.

That is supportive for precious metals.

Lower yields reduce the opportunity cost of owning gold and silver, while a softer inflation impulse from oil reduces the risk that the Fed will need to move even more aggressively.

So even though the Fed had just raised its policy rate, market rates were moving in a more favorable direction for metals.

The broader inflation picture remains uncomfortable.

Chicago Fed President Austan Goolsbee said Monday that strong demand may now be contributing to inflation alongside energy and supply pressures. He warned that if demand is running too hot, the Fed would have little choice but to respond with higher rates.

That is important for gold.

Investors are balancing two competing forces:

Higher Fed rates are a near-term headwind. Persistent inflation remains a longer-term reason investors seek exposure to precious metals.

That helps explain why gold has not simply fallen in response to the Fed hike.

The fiscal backdrop has not changed either.

The Fed is trying to suppress inflation with higher rates while the federal government carries more than $40 trillion of debt.

Higher rates eventually raise Washington’s interest expense as maturing Treasury securities are refinanced at higher yields.

That does not mean one Fed hike immediately creates inflation. But it creates a longer-term tension:

Higher rates raise federal interest costs. Larger interest costs add to deficits. Larger deficits require more borrowing. And if that dynamic eventually makes it harder for the Fed to maintain restrictive policy, the risk of fiscal dominance rises.

For longer-term gold investors, that monetary-versus-fiscal tension may matter more than any individual rate decision.

Silver continues to behave like a higher-beta version of the gold trade.

It benefits from many of the same monetary and safe-haven forces as gold, but its smaller market and industrial demand component tend to create larger percentage moves.

The $70–$71 area remains the major technical level to watch after silver’s earlier rejection there.

A sustained move back toward that zone would suggest precious-metals momentum is broadening again.

Oil prices have retreated, but Middle East risks remain significant.

Reuters reported that shipping through the Strait of Hormuz remains severely disrupted, with only 17 commodity vessels crossing during the weekend compared with a pre-conflict average of roughly 125 per day.

That matters for gold in two ways.

Geopolitical uncertainty supports safe-haven demand, while renewed disruption to energy supplies could quickly bring inflation fears back to the forefront.

This is a relatively light week for major economic data, so Fed commentary may have an outsized effect on markets.

There is no CPI, PPI or monthly jobs report this week, making the calendar relatively light on hard data and heavy on Fed commentary. After last week’s rate hike, headline risk is likely to center on what Fed officials say about inflation and the path of rates from here.

Gold and silver did not rally because higher interest rates suddenly became bullish.

They performed well because the Fed hike was largely expected, oil and Treasury yields eased afterward, and the underlying inflation, geopolitical and fiscal concerns remain unresolved.

The market may increasingly be separating short-term monetary tightening from the long-term inflation and debt story.

For precious metals, that distinction may be the more important one.

Website: GlobalBullionTracker.com
Newsletter: brief.globalbulliontracker.com
X: @TeamGBT2026
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Disclaimer: This newsletter is for informational and educational purposes only and does not constitute investment, financial, legal, or tax advice. Global Bullion Tracker does not recommend buying or selling any security, commodity, or investment product. Always conduct your own research and consult a qualified professional before making investment decisions.

Sources: Federal Reserve, Reuters, S&P Global, U.S. Department of Labor, U.S. Census Bureau, University of Michigan, Global Bullion Tracker.