The Federal Reserve raised interest rates by 25 basis points on Wednesday, marking its first increase since 2023 and bringing the target range to 3.75%-4.00% [2][3]. This move was unanimously supported by Fed officials, with the dot plot indicating that 16 of 18 expect at least one more rate hike this year [2][3]. Kansas City Fed President Jeffrey Schmid emphasized that inflation remains above 3% and is not solely driven by energy prices, describing price growth as 'hot' across a broad range of goods and services and the labor market as balanced [2][3].
Gold (XAU/USD) rebounded on Friday, rising 0.89% to $4,379 after hitting a nearly two-month low of $4,235 earlier in the week, as easing oil prices offset lingering pressure from near-5% US Treasury yields [2]. The US Dollar Index (DXY) was nearly flat at 100.29, while the 10-year Treasury yield climbed close to 5.00%, just shy of the 2007 high of 5.04% [2][3]. Technical analysis shows gold facing resistance at $4,400, with momentum favoring buyers according to the RSI [2]. Money markets priced in a 55% chance of another Fed rate hike at the October meeting [2].
Silver (XAG/USD) traded around $66.76, its highest level since September 10, and was on track to end the week more than 3% higher [1]. The metal's mild bullish bias was supported by its position above the 50-day and 100-day SMAs, though the 200-day SMA at $73.18 remains a distant resistance [1]. The RSI at 55 indicated a mildly bullish tone, but the MACD was slightly negative and the ADX reading of 12 pointed to a weak trend environment [1]. Elevated US Treasury yields and the Fed's signal for potential further tightening could limit silver's upside [1].
The US Dollar lost momentum heading into the weekend, with traders booking profits after a strong weekly advance [1][3]. USD/CHF turned lower to 0.8220 after briefly climbing above 0.8250, its highest since May 2025, but remained on track for a fourth straight weekly gain, largely due to Swiss Franc weakness [3]. The interest-rate gap between the US and Switzerland, where the Swiss National Bank (SNB) keeps its policy rate at zero, could make US Dollar-denominated assets more attractive and leave the Swiss Franc vulnerable to further losses [3]. The SNB's next monetary policy decision is scheduled for September 24, 2026 [3].
Market participants are also watching for upcoming US economic data, including speeches by Fed officials, jobs data, S&P Flash PMIs, and Durable Goods Orders next week [2].
CONCLUSION
The Fed's 25-basis-point rate hike has triggered notable volatility across gold, silver, and currency markets, with gold and silver rebounding and the Swiss Franc weakening against the US Dollar. Elevated Treasury yields and expectations of further tightening continue to shape market sentiment. Investors are now focused on upcoming central bank decisions and US economic data for further direction.