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(Bloomberg) -- Gold swung lower after Federal Reserve officials signaled another rate-increase is likely this year, after raising on Wednesday for the first time in three years.Bullion slumped as much as 1.3% after Fed Chair Kevin Warsh used his post-decision briefing to reaffirm the threat posed by inflation in the US economy. The Fed’s dot plot for rate projections showed another rate increase by the end of 2026. Gold’s slide — prices reversed from an earlier gain of as much as 1.7% — reflects wider market reaction that interpreted the Fed’s guidance as hawkish. Treasury yields fell along the curve, with the two-year yield hitting its highest since July 2024. The dollar jumped as much as 0.5%The US central bank’s “hawkish hike hits gold through a stronger dollar and higher real yields,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman.Gold was 0.6% lower at 4,266.73 an ounce by 3:43 p.m. New York time, heading for its third straight daily decline. Higher rates tend to weigh on bullion because it doesn’t pay interest, and gold is now down about 4% in September — from above $4,700 in late August — as traders braced for this Fed decision.In his post-meeting remarks, Warsh again vowed to contain inflation, saying too many categories of products were showing price increases. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved,” he said. Expectations for a rate hike — the first since July 2023 — had been building in recent weeks, especially as renewed conflict in the Middle East sent oil prices surging above $100 a barrel again. Ahead of the decision, traders had been pricing a 90% chance of an increase.The Federal Open Market Committee voted unanimously to increase the benchmark federal funds rate to a range of 3.75% to 4%. The increase, and the committee’s statement, signaled that the Fed will keep policy tight to bring inflation back to its 2% target, according to Bloomberg Economics. Platinum, palladium and silver also declined. --With assistance from Christine Buurma.More stories like this are available on bloomberg.com©2026 Bloomberg L.P.
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