Gold Rises Over 1% as Investors Digest Fed Hike, Oil Rally Stalls

By Angel No Lie | KPD Online | 17 September 2026 | Independent Markets Report

Gold prices moved higher on Thursday as investors assessed the U.S. Federal Reserve’s latest interest-rate decision, while easing concerns over Middle East oil supplies took some momentum out of the recent crude rally.

Spot gold was initially up more than 1% in Asian trading, reaching about $4,310.49 per ounce at 0149 GMT, according to Reuters. Later in the session, the gain had moderated to 0.8%, at $4,295.26, showing how quickly prices were adjusting after the Fed decision.

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Fed raises rates by 25 basis points

The Federal Reserve raised its benchmark federal funds target range by 25 basis points to 3.75%-4.00% on Wednesday.

The decision was approved unanimously by the Federal Open Market Committee. The Fed said economic activity was expanding at a solid pace but that inflation remained elevated.

The accompanying projections indicated that the rate increase may not be the final move this year. Reuters reported that 16 of 18 Fed policymakers expected at least one additional quarter-percentage-point increase before the end of 2026.

That creates a complicated environment for gold.

Gold does not pay interest, so higher interest rates can make yield-bearing assets comparatively more attractive. At the same time, expectations surrounding inflation, currencies, geopolitical risks and investor demand for defensive assets can support bullion.

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Gold’s move came after a sharp pullback

The rise followed a weaker session in which gold had reached a near six-week low.

Reuters reported that technical factors were contributing to Thursday’s rebound, while the Fed’s more hawkish message had already been largely reflected in market pricing.

U.S. gold futures did not mirror the initial spot-market gain. December futures were reported down roughly 1.2% at $4,333.90 in later trading.

That divergence is important: the headline rise in spot gold does not necessarily indicate a broad-based bullish move across all gold contracts.

Oil rally loses momentum

The other major part of the market story is oil.

Brent crude futures fell 1.2% to $104.59 a barrel, while U.S. West Texas Intermediate declined 1.1% to $101.29 in early Thursday trading. Both contracts had fallen by roughly $3 on Wednesday.

The decline followed reports that Saudi Arabia was offering additional crude cargoes to Asian buyers through ship-to-ship transfers off Sohar, Oman.

The alternative export route is helping reduce immediate concerns about supply disruptions following attacks on Saudi Arabia’s East-West pipeline and disruption at the Red Sea export hub of Yanbu.

Commodity snapshot

Figures reflect different points in Thursday’s trading and therefore should not be interpreted as simultaneous closing prices.

Why oil matters for gold

Oil and gold are responding to several of the same macroeconomic forces, but in different ways.

Higher oil prices can intensify inflation concerns because energy is an important input into transportation, manufacturing and household costs. Persistent energy inflation can, in turn, make central banks more reluctant to cut interest rates.

Conversely, a sustained decline in oil prices could reduce some inflation pressure. Reuters quoted OANDA analyst Kelvin Wong as saying continued oil weakness could provide additional support for gold over the medium term.

For now, however, the oil market remains exposed to developments in the Middle East. Reuters reported that the East-West pipeline disruption has not been fully resolved and that uncertainty remains over repairs.

The bigger picture

The market is therefore dealing with two competing forces.

For gold:

• renewed safe-haven demand;
• geopolitical uncertainty;
• expectations surrounding inflation;
• technical buying after the recent decline;
• but also pressure from relatively high U.S. interest rates.

For oil:

• continuing geopolitical and transportation risks;
• disruption affecting Saudi export infrastructure;
• alternative shipment arrangements through Oman;
• and signs that some immediate supply fears are easing.

Independent assessment

Thursday’s market action does not point to a single, straightforward trend.

Gold’s initial more-than-1% rise was significant, but the subsequent moderation shows that investors remain sensitive to the Fed’s higher-for-longer interest-rate signal. Meanwhile, oil’s retreat suggests that alternative Saudi export arrangements have reduced some of the immediate supply anxiety, although the underlying Middle East risks remain.

The key question for markets is whether oil prices continue to fall as supply routes normalize, or whether renewed disruptions push energy prices higher again. That outcome could materially influence inflation expectations, interest-rate expectations and, consequently, gold.

In short: gold is being supported by defensive and technical factors, while oil is losing some of its geopolitical risk premium—but neither move should yet be interpreted as a settled new market direction.

Sources: Reuters; U.S. Federal Reserve.