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Gold shrugs off Fed hike as falling yields reopen path to $4,400

September 17, 2026

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Gold clears the 100-day SMA as falling yields revive demand.
Fed hike fails to derail bullion as October odds for another rate raise stay elevated.
Oil pullback eases inflation pressure, helping XAU/USD target $4,400.

Gold (XAU/USD) rallies on Thursday, up by more than 2% as investors digest the latest rate hike by the Federal Reserve (Fed), while a fall in Oil prices pushed the US Dollar and US yields lower. The XAU/USD pair trades at $4,361, clearing a key technical resistance level at the 100-day Simple Moving Average (SMA) of $4,320, as buyers set their sights on $4,400.

XAU/USD clears key resistance as lower yields overpower Fed’s hawkish message

A potential de-escalation of the Middle East conflict underpins the non-yielding metal, benefiting from lower Oil prices. West Texas Intermediate (WTI), the US crude benchmark, is down by about 0.16%, undermining the Greenback given its positive correlation.

The US Dollar Index (DXY), which measures the buck’s performance against six currencies, is down 0.12% at 100.22. At the same time, US Treasury yields erased some of Wednesday’s hawkish Fed-tilt, down 7 basis points to 4.949%.

A day ago, the Federal Reserve raised rates as expected, 25 basis points to the 3.75%-4% range, the first in three years, opening the door for further tightening as the US central bank recognises that the economy remains growing strongly.

Fed Chair Kevin Warsh said that “the fact is that inflation is too high and has been for too long.” The Fed dot plot, in which officials express their expectations for the path of interest rates, shows the Fed funds rate hovering around 4.10% at the end of 2026, suggesting another rate increase is expected in the foreseeable future. This is in line with their inflation expectations, as the Personal Consumption Expenditures (PCE) price index is expected to remain at 3.7% this year and converge toward the Fed’s 2% goal through 2028.

Money markets have priced in a 53% chance of another rate hike at the October meeting, according to Prime Terminal.

Regarding data, the US economic report showed that jobless claims for the week ending September 12 fell significantly from 206K to 196K, below the expected 208K.

On Friday, the US economic schedule will feature the Fed’s August Industrial Production report and a speech by Fed Governor Michelle Bowman.

XAU/USD technical analysis: Gold may challenge $4,400 on a close above $4,367

Price action in the short-term is poised for a recovery as a ‘bullish engulfing‘ candle pattern develops. If Gold closes above the September 16 high of $4,366, this could confirm a bullish recovery, but buyers must push prices above $4,500.

The Relative Strength Index (RSI) is trending higher but remains below its 50 neutral level, indicating neither buyers nor sellers are in control. However, if it clears 50 , further upside in Gold is expected.

XAU’s first resistance is $4,400, followed by the psychological levels of $4,450 and $4,500. Once cleared, the next area of interest is the 200-day SMA at $4,540.

On the downside, Gold could register another leg lower if it drops below the 100-day SMA at $4,323, then the $4,300 mark. If achieved, the non-yielding metal will fall further, with the next support level the 50-day SMA at $4,283, followed by the July 6 high-turned support at $4,202.