Gold prices edged higher Thursday, trading near $4,321, after the Federal Reserve raised its benchmark rate for the first time in more than three years. Silver climbed alongside it to $64.12,
Gold prices edged higher Thursday, trading near $4,321, after the Federal Reserve raised its benchmark rate for the first time in more than three years. Silver climbed alongside it to $64.12, recovering more than half of Wednesday's sharp selloff.
The 10-year Treasury yield held close to 5% while the U.S. dollar index pushed to a seven-week high of 100.35. Both moves added pressure on bullion, but neither metal broke down.
The Federal Reserve raised its target rate by 25 basis points to a range of 3.75% to 4.00%. The FOMC vote was unanimous, 12-0.
Fed Chair Kevin Warsh said inflation had stayed too high for too long and gave no indication policymakers are done tightening. The updated dot plot showed 16 of 18 officials expect at least one more hike this year, with four projecting two additional increases.
President Trump again called publicly for lower rates, but the unanimous vote sent a hawkish signal to markets regardless. The 2-year yield held near 4.72%, underscoring expectations that policy will stay restrictive.
The dollar index jumped to 100.35 on the decision. A confirmed break above 100.50 could open the door to 101.80, a level that would likely keep gold and silver capped in the near term.
The 10-year yield is pressing toward a long-term resistance zone at 5.20% to 5.30%, sitting above both its 50-month and 200-month moving averages. The monthly RSI near 66 points to strong momentum, though September's candle has not closed.
Real yields are doing more of the damage. The 10-year inflation-protected yield reached 2.62% on September 15, close to its highest level since the 2008 financial crisis, raising the opportunity cost of holding non-yielding metals.
Warsh pointed to a stronger economy, AI-related capital demand, and geopolitical instability as the main drivers behind higher long-term yields.
The real yield has also pushed above the descending resistance line stretching back to the 2023 high, adding to the case that inflation-adjusted returns on government debt are becoming more competitive with gold.
Heavy federal borrowing is compounding the move, with U.S. debt above $40 trillion and the FY2026 deficit near $1.97 trillion through August. Elevated Treasury supply looks likely to keep long-term yields sticky even if the Fed slows its pace of hikes.
The median Fed funds rate projection was also lifted, to 4.0% from 3.5%. Goldman Sachs and BofA have both moved their forecast for the next hike from December to October, with markets now pricing a fourth increase this year at roughly 50% probability.
The next real test for gold and silver will be what the Fed signals heading into that October meeting.
Gold is trading around $4,321.89 after pulling back from a peak just above $4,650 in early September. Thursday's candle opened at $4,260.09, ran to a high of $4,335.45, and found a low of $4,257.60, trading near 1.36% on volume of 377.78K.
Price is now testing a tight cluster of moving averages between roughly $4,320 and $4,366. The 20 EMA sits at $4,365.70, the 50 EMA at $4,341.69, and the 100 EMA at $4,361.13, with all three flattening after the sharp run-up from August.
The 200 EMA, at $4,319.28, continues to slope higher and sits just below spot, making it the key support to watch. A daily close beneath it would weaken the bullish structure and open a path toward $4,257, and potentially back to the $4,100 to $4,200 shelf from August.
A descending trendline from the September swing high is also in play. A breakout above it and a reclaim of the EMA cluster near $4,366 would favor a resumption toward the $4,600 to $4,650 highs.
The broader risk sits at the $4,000 level. A break of the 5.20% to 5.30% yield zone combined with real yields above 2.60% could expose $4,000 and, beyond that, $3,000.
On the other side, weaker growth, falling yields, or renewed safe-haven demand could send gold back toward $5,600 and eventually $6,000.
Silver dropped more than $2 from Wednesday's session high to $62.31 before buyers stepped back in, lifting price $1.45 off that low and recovering more than half of the day's $2.63 range. That is not the follow-through bears were looking for after a hawkish Fed.
Thursday's candle opened at $62.94, reached a high of $64.43, and a low of $62.81, trading at $64.12, up 1.87% on volume of 97.7K. Price remains inside a broader corrective structure that began after silver's failed breakout above $87 in early May, which was followed by a collapse to $55.60 in July.
The EMA structure is still inverted relative to a healthy uptrend. The 20 EMA ($64.84) and 50 EMA ($64.67) sit close together just above spot, while the 100 EMA ($66.11) and 200 EMA ($65.50) sit higher still, reflecting unfinished repair work from the July selloff.
Since the July low, silver has carved a series of higher lows and higher highs, with the recent dip to $62.80 finding buyers and the bounce back above $64 putting price right on top of the 20/50 EMA pivot.
A daily close above the 100 EMA at $66.11 would be the first real signal of a shift back into an uptrend, opening a path toward $70 and a possible retest of the May highs.
A break below $62.80 support would suggest the recovery from July is losing steam, risking a slide back toward $60 or the $55 to $56 zone. Silver, as an industrial metal alongside its safe-haven role, tends to react more sharply to tightening monetary policy than gold, which has made its recovery from the July low more volatile.
The link between Treasury yields and precious metals has not been constant. From August 2020 to October 2023, the 10-year yield surged while gold and silver largely consolidated, moving in the direction textbook logic would predict.
From October 2023 through early 2026, yields moved sideways at elevated levels while both metals posted strong gains, a reminder that geopolitical risk, inflation concerns, and safe-haven demand can outweigh the pressure from higher rates.
Since February 2026, the renewed climb in yields has coincided with corrections in both metals, suggesting the relationship has reverted to its more traditional inverse pattern for now.
Cooling crude oil prices added some support Thursday, easing near-term inflation fears and reducing the odds the Fed will need an even more restrictive stance to bring inflation down.
Ongoing tension between the West and Iran continues to underpin safe-haven demand for gold as well.
Gold and silver both absorbed a hawkish Fed decision without losing key support, a sign that underlying demand remains intact. Gold's pivot zone sits between $4,320 and $4,366, while silver's pivot sits near $64.70 to $64.84.
The 10-year Treasury yield's approach to the 5.20% to 5.30% resistance zone, alongside the dollar index's test of 100.50, will likely decide whether the current pullback in both metals extends or fades in the sessions ahead.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.
