Prepare Yourself! Gold Prices Set for Volatility Ahead of Fed Decision

Gold prices declined during trading on Tuesday (15/09/2026). Investors and traders are concerned by the strengthening US dollar and the surge in Treasury yields. Rising oil prices have also triggered inflation concerns, strengthening expectations of a Federal Reserve interest rate hike this week.

According to Refinitiv, gold prices on Tuesday closed at US$ 4,283.97 per troy ounce, representing a slight decline of 0.12%. This weakness extends its negative trend, marking two consecutive days of losses.

As of Wednesday (16/09/2026) at 06:45 WIB, gold prices stood at US$ 4,283.97 per troy ounce, down 0.20%.

“Higher energy prices trigger inflation. Higher inflation can drive interest rates up. This is not good for gold,” said Daniel Pavilonis, Senior Market Strategist at StoneX, to Reuters.

The market is now awaiting the Federal Reserve’s decision, expected on Wednesday or early Thursday morning Indonesian time. Market participants anticipate that the US central bank will raise interest rates by 25 basis points to a range of 3.75%-4% and signal further tightening.

A stronger dollar makes gold, which is priced in dollars, more expensive for holders of other currencies. Meanwhile, the 10-year US Treasury yield has reached its highest level since 2007.

Gold is well-known as a hedge against inflation and geopolitical uncertainty. However, the rise in yields on risk-free assets, such as Treasuries, reduces the attractiveness of gold, which provides no yield.

“Most of the risk of a hawkish Fed seems to have been priced in. However, gold remains vulnerable if policymakers signal that interest rates will remain higher for longer,” wrote an analyst from ING.