Gold retreats amid Dollar strength, rate outlook

September 23, 2026 (MLN):  Gold prices retreated on Wednesday as investors factored in the likelihood that major central banks would keep borrowing costs elevated for a longer stretch in their bid to tame persistent inflation.

Currently, spot gold is down 0.58% to $4,322.17  an ounce as of [12:34 pm] PST, according to data reported by Mettis Global.

The US dollar held steady near a two-month high, with a stronger greenback making dollar-denominated bullion costlier for buyers using other currencies.

Gold is typically viewed as a hedge against inflation, but its attractiveness diminishes when higher interest rates offer better returns on yield-bearing assets.

Separately, US President Donald Trump cautioned that Iran could face severe consequences in the absence of a deal to end the ongoing war, though he also indicated a settlement could be reached soon as diplomatic efforts continue at the United Nations.

The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75-4.00% last week and signalled the possibility of a further hike before the year is out.

The Bank of Japan and the European Central Bank have also tightened policy in recent weeks.

BMI analysts kept their 2026 average gold price forecast unchanged at $4,400 per ounce, pointing to heightened geopolitical risks and sustained central bank buying as factors likely to keep prices supported around the $3,800 level, according to CNBC.

Among other precious metals, spot silver slipped 0.4% to $66.78 per ounce, platinum dropped 0.8% to $1,818.21, and palladium eased 0.4% to $1,302.61.

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