Gold drops to $4,282 as Fed tightening looms

September 24, 2026 (MLN): Gold prices traded lower on Thursday as bets on further US Federal Reserve tightening weighed on the metal, while softer oil prices provided a modest cushion.

Currently, spot gold is down 2% to $4,281.98  an ounce as of [11:30 am] PST, according to data reported by Mettis Global.

Oil prices edged down after Iran said it remained open to diplomacy to end the US-Iran war, although the two sides are still far apart on how to get there.

The Fed raised its benchmark interest rate by 25 basis points to a range of 3.75 % to 4.00 % last week.

Rising inflation pressures and a strengthening economy appear to be steering the central bank towards another increase just ahead of key national elections, with traders heavily positioning for a second consecutive hike in late October, according to CNBC.

Higher rates typically reduce the appeal of gold, which pays no interest, even though it is widely seen as a hedge against inflation.

Data released on Wednesday showed US business activity in September climbing to its highest level in more than five years, although robust demand strained supply chains and pushed prices higher.

Among other metals, spot silver fell 0.6% to $64.07 per ounce, platinum rose 0.2% at $1,754.05 and palladium lost 0.1% to $1,260.70.

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