September 24, 2026 | Global Markets

Gold prices edge lower as higher-for-longer rate expectations weigh on bullion

Gold prices moved lower on Thursday as growing expectations for further U.S. Federal Reserve tightening strengthened the dollar and reduced the appeal of the non-yielding precious metal.

Spot gold fell 0.3% to around $4,274.79 per ounce, while U.S. gold futures for December delivery declined 0.2% to approximately $4,309.80, according to Reuters.

Fed policy remains the key driver

Recent comments from Federal Reserve officials have reinforced expectations that interest rates could remain elevated or rise further as policymakers respond to persistent inflation pressures.

A stronger dollar and higher interest-rate expectations have created additional headwinds for gold. Higher yields increase the opportunity cost of holding an asset such as gold, which does not generate interest income.

Gold had already fallen more than 1% on Wednesday, reaching a near one-week low after hawkish signals from Fed policymakers pushed the U.S. dollar toward a two-month high.

Long-term gold demand remains strong

Despite the recent pullback, underlying investment demand for gold remains substantial.

The World Gold Council reported that physically backed gold ETFs attracted $18 billion of inflows in August, while global holdings increased by 121 tonnes to a record 4,189 tonnes. Global ETF assets under management reached approximately $615 billion.

Central banks are also continuing to accumulate gold. In July, reported central-bank net purchases reached 23 tonnes, with China and Poland among the largest buyers. Year-to-date reported purchases were around 130 tonnes.

Market Outlook

The gold market is currently caught between short-term monetary-policy pressure and longer-term structural demand.

Short-term factors to watch:

  • Federal Reserve interest-rate expectations
  • U.S. Dollar Index
  • Treasury yields
  • Inflation and economic data
  • Oil prices and geopolitical developments

Longer-term support:

  • Strong gold ETF demand
  • Continued central-bank accumulation
  • Geopolitical uncertainty
  • Investor demand for portfolio diversification