Everbright Futures 0917 Gold Review: Hawkish Rate Hike Implemented, Gold Experiences Sharp Intraday Volatility and Closes at Four-Week Low

On September 16, COMEX gold saw extremely volatile intraday movements—before the policy decision was announced, it briefly surged, with an intraday gain of over 1%; after the decision was released, it sharply reversed course, closing at $4,302.5 per ounce, down 0.70%. Meanwhile, domestic SHFE gold night trading session weakened during fluctuations, closing at 935.18 yuan/gram, up 0.41%.

Previously, the expectation that all the "bearish news was priced in" was reversed. On Wednesday, the Federal Reserve as expected announced a 25 basis point rate hike, increasing the target range for the federal funds rate to 3.75%–4.00%, marking the first rate hike since July 2023. Unlike the July meeting where there were three dissenting votes, this decision was unanimously approved by all 12 FOMC voting members. Before the announcement, the market largely believed that near-term rate hike expectations had already been fully priced in, triggering a round of "bearish news priced in" trading—spot gold briefly peaked at $4,367.99 before the decision. However, two subsequent signals completely reversed the situation: First, the Federal Reserve's updated economic forecasts showed that interest rates could reach 4.1% by year-end, suggesting at least one more hike within the year; second, Federal Reserve Chair Walsh adopted a much more hawkish stance at the press conference, promising to "achieve price stability" and removing the previous statement’s specific explanations about the Middle East conflict and energy supply shocks, instead using the more generalized phrase "developments in the geopolitical situation." Following the decision, the US Dollar Index quickly surged above the 100 level, up 0.7% on the day. The 10-year US Treasury yield remained elevated near 4.97%, continuing to pressure the holding cost of non-yielding assets like gold.

Looking ahead, the results of this FOMC meeting put clear short-term pressure on gold's movement. Walsh’s combination of a "hawkish rate hike + hinting at continued tightening" means that expectations for rising rates may not be fully priced in yet. There are two key variables to watch moving forward: first, the trajectory of subsequent Federal Reserve economic data, especially whether inflation undergoes a substantive decline; and second, whether the long end of US Treasury yields can retreat from the elevated 5% region.

Source: Wind, Everbright Futures Research Institute

Written by: Shi Yueming

Professional qualification: F03097365

Trading advisory qualification: Z0017563

Editor: Zhu Henan