Gold Prices Plummet for Two Consecutive Days Amid Grim Forecasts
Gold prices have weakened, pressured by rising oil prices and a shift towards more hawkish rhetoric from the US Federal Reserve, which has strengthened expectations of interest rate hikes.
According to Refinitiv, gold prices closed at US$4,277.98 per troy ounce on Thursday (24/09/2026), the lowest level since 16 September 2026, marking a decline of 0.21%. This downturn extends gold’s recent losses, with a 1.8% drop recorded over the last two days.
As of Friday (25/09/20t6) at 06:39 WIB, gold prices had slipped another 0.1% to US$4,273.71 per troy ounce.
“Gold continues to be burdened by rising energy prices and higher interest rates. With increasing energy costs, inflation concerns are growing, opening the possibility for additional rate hikes by the Fed,” said David Meger, Director of Metals Trading at High Ridge Futures, as cited by Refinitiv.
Oil prices rose by approximately 2% on Thursday after Houthi missile attacks on Saudi Arabia reignited fears of supply disruptions. Rising energy costs can drive inflation as producers pass increased costs on to consumers, a condition that may force central banks to implement tighter monetary policies to curb prices.
The Fed raised interest rates for the first time in three years last week and signalled that further hikes are likely this year. Several Fed officials have reaffirmed the need for further increases, with Fed Governor Michael Barr being the latest official to highlight the necessity of tighter monetary policy.
Market participants now estimate a 69% probability of an interest rate hike in October, according to the CME FedWatch Tool. Although gold is traditionally viewed as a hedge against inflation, rising interest rates reduce its attractiveness. Pressure on gold also stems from the US dollar reaching a two-month high, making gold priced in dollars more expensive for international buyers. Meanwhile, the 10-year US Treasury yield remains near its highest level in almost two decades, increasing the opportunity cost of holding non-yielding gold.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, predicts that gold prices could fall to US$4,000 if the pressure persists. “The gold support level around US$4,235 is the first level to watch. If this level is breached, the market could experience a deeper correction and head back towards the US$4,000 area, as seen in June-July,” said Hansen.
Silver prices also fell. According to Refinitiv, silver closed at US$63.91 per troy ounce on Thursday (24/09/2026), a decline of 0.27%. This weakness follows a broader decline, with silver dropping 4.78% over the last two days. As of Friday (25/09/2026) at 06:41 WIB, silver prices continued to drift lower by 0.3% to US$63.73 per troy ounce.