Gold and Silver Prices Plummet as Traders Fear The Fed
Gold and silver prices have slumped in line with market expectations predicting an interest rate hike by the US Federal Reserve (The Fed).
According to Refinitiv, gold prices on Monday’s trading (21/09/2026) closed at US$ 4,342.96, weakening by 0.78%. This decline broke its positive trend, which had seen gains for two consecutive days.
As of Tuesday (22/09/2026) at 05:41 WIB, gold prices had recovered slightly by 0.21% to US$ 4,352.13 per troy ounce.
Expectations of rising interest rates have pushed the US dollar stronger to 100.395. A stronger dollar makes gold more expensive for holders of other currencies.
“We see that there is still concern among bullish investors regarding tighter US monetary policy. This condition pushed the US dollar index to its highest level in more than two months on Friday. These bearish factors are weighing on precious metals,” said Jim Wyckoff, market analyst at the American Gold Exchange, as quoted by Refinitiv.
According to the CME FedWatch Tool, market participants estimate the probability of a US interest rate hike in December to reach 88%.
Gold is traditionally viewed as a hedge against inflation. However, its attractiveness diminishes when interest rates are high, as investors can earn yields from interest-bearing assets.
The US-Israel conflict with Iran has driven energy prices higher, increasing inflation concerns and reinforcing the stance of tight monetary policies by central banks. These conditions have caused gold prices to drop 17% from their peak on 27 February.
Federal Reserve Minneapolis President Neel Kashkari stated on Sunday that inflation remains too high across various sectors of the US economy, and is not solely due to rising oil prices.
Analysts at TD Securities predict that the short-term weakness in the precious metals market will be limited, primarily due to selling from Commodity Trading Advisors (CTA). They suggest that this decline may actually present a potential buying opportunity for gold.
Meanwhile, silver prices on Monday’s trading (21/09/2026) closed at US$ 66.03, weakening by 0.32%. This decline interrupted its positive trend of two consecutive days of gains.
As of Tuesday (22/09/2026) at 05:41 WIB, silver prices had risen by 0.1% to US$ 66.1 per troy ounce.