Gold rallied early Wednesday on easing oil prices, rebounding after a two-day drop ahead of the Federal rate decision which which will be announced later today. There are broad expectations that the central bank will raise interest rates for the first time in more than three years.
The war in Iran and an associated surge in inflation has spurred speculation of a rate hike. Higher interest rates are typically bearish for gold, making it a less attractive alternate investment. Higher bond yields are also pressuring the yellow metal, as the 10-year Treasury yield rose to the highest level in almost two decades.
If the Fed fails to raise rates—or the statement following the meeting indicates that more rate hikes aren’t on the horizon—it could prove bullish for gold, given that investors have priced in a rate hike and possibly more later this year. After Wednesday, the next Fed policy meeting is Oct. 28, six days before the U.S. midterm elections. U.S. President Donald Trump has repeatedly pushed the Fed to cut rates, but recent economic reports, particularly on inflation and the labor market, have made this less likely.
December gold futures fell 0.4% Tuesday to settle at $4,332.80 an ounce on Comex, and the front-month contract lost 1.7% in the first two days of the week. Bullion rose 9.1% last month after gaining 1.7% in July, its first monthly increase since February, and sliding 12% in June. It decreased 7% in the first half of 2026 after rallying 64% last year. The December contract is currently up $57.9 (+1.34%) an ounce to $4390.70 and the DG spot price is $4353.00.
More than 92% of investors tracked by the CME FedWatch Tool are now betting that the Fed will raise interest rates by 25 basis points to 3.75% to 4.00% on Wednesday, while the rest are expecting rates to remain unchanged at 3.5% to 3.75%. The Fed has kept interest rates unchanged this year after three previous rate cuts.
The Fed closely watches inflation and labor market data when setting monetary policy.
The consumer price index report for August, which came out late last week, showed that inflation came in slightly higher than economists had expected, mostly on soaring fuel prices from the war with Iran. The CPI data came a day after U.S. producer price index data for August showed the biggest rise in three months because of high energy prices.
The European Central Bank last week raised its key rate to 2.50% in its second rate increase this year and warned that inflationary pressures won’t be going away soon.
December silver futures decreased 0.4% Tuesday to settle at $63.86 an ounce on Comex, and the front-month contract declined 2% in the first two days of the week. The most-active contract touched a record above $115 in January. Silver climbed 16% last month after sliding 3.6% in July and declining 21% in June. It lost 15% in the first half of 2026 after rising 141% last year. The December contract is currently up $1.194 (+1.87%) an ounce to $65.050 and the DG spot price is $64.74.
Spot palladium rose 0.4% Tuesday to $1,300.00 an ounce but lost 1.3% so far this week. Palladium rallied 5.7% last month after adding 5.8% in July and dropping 11% in June. It retreated 25% in the first half of 2026 after rising 74% last year. Currently, the DG spot price is up $13.40 an ounce to $1311.00.
Spot platinum edged up 0.2% Tuesday to $1,779.00 an ounce, but has retreated 1.2% this week. Platinum rose 7.5% last month after gaining 6.6% in July and tumbling 19% in June. Platinum slid 23% in the first half of 2026 after increasing 122% in 2025. The DG spot price is currently up $17.90 an ounce to $1796.90.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.