The American Times News | Economy, Geopolitics, Calculators

Gold's reaction to the Federal Reserve's September 2026 rate hike shows why the relationship between interest rates and precious metals is more complicated than it appears. The Federal Reserve raised its benchmark interest-rate range by 25 basis points on September 16, taking it to 3.75%-4%. Normally, higher rates create pressure on gold because the metal does not pay interest or dividends. Yet on September 17, spot gold rebounded more than 2% to $4,360.36 an ounce, while December U.S. gold futures settled at $4,399.70. Reuters attributed the immediate rebound mainly to a weaker U.S. dollar, lower Treasury yields and falling oil prices. However, that rebound should not be mistaken for a sustained rally. Gold subsequently came under renewed pressure as oil prices rose, Treasury yields climbed and expectations for additional Fed tightening increased. By October 1, spot gold was around $4,159 an ounce and the metal had lost more than 6% during September. The bigger story is theref...

Central banks no longer hold gold because modern currencies need to be backed by it. They hold it because gold serves a different purpose in today's reserve system: diversification, long-term value preservation, crisis resilience and independence from any single issuer or payment network. That role has become more visible in 2026. The World Gold Council's latest central-bank survey found that central banks have accumulated an average of about 1,000 tonnes of gold a year over the past four years, roughly twice the 500-tonne annual average recorded during the preceding decade. The survey also found that 89% of reserve managers expect global official gold holdings to increase over the next 12 months, while a record 45% expect their own institutions to add gold. The trend is not uniform across every country, and central banks remain sensitive to the cost of gold, liquidity needs and broader market conditions. But the strategic reasons for holding bullion have become increasingly im...