SPONSORED CONTENT
MARKETS · PRECIOUS METALS
Monday 21 September 2026
Metals bounce after the Fed’s first hike in three years, as oil eases and official buying holds up.
Gold and silver spent last week doing something the textbooks say they should not.
After the US Federal Reserve’s first rate rise in three years, prices stumbled and then climbed back.
On 16 September the Federal Open Market Committee lifted the funds rate by 25 basis points to between 3.75 and 4 per cent, in a unanimous vote under Chair Kevin Warsh.
The committee’s statement said inflation remained too high.
Markets promptly priced a further move, with CME FedWatch putting the chance of an October hike at more than 50 per cent, up from 44 per cent the day before.
Ten-year Treasury yields briefly pierced 5 per cent.
The US dollar firmed.
Gold futures dropped to an intraday low of US$4,315.20.
By Friday 18 September gold was back at a one-week high of between US$4,380 and US$4,440, its first weekly gain in four weeks.
Silver, which had already jumped about 3 per cent on Thursday to around US$65.50, traded near US$66, its highest in more than a week.
Precious metals that pay no interest were, once again, refusing to take the hint.
The immediate lubricant was oil.
Brent crude fell for a third session as reports that Saudi Arabia was restoring shipments through its East-West pipeline, and talk of talks between Washington, the Gulf states and Iran, cooled fears of a prolonged energy shock.
Lower crude eased inflation anxiety, pulled yields back towards 4.93 per cent and made non-yielding bullion look less unattractive.
The Bank of England held rates, while the Bank of Japan was expected to lift its policy rate to a 31-year high.
That is the tactical story.
The strategic one is less tidy.
Gold remains well below its 28 January record of about US$5,590.
From that peak gold had, at one stage, gone backwards nearly 30 per cent.
J.P. Morgan still targets US$6,000 in the fourth quarter of 2026 and US$6,300 in 2027.
Goldman Sachs trimmed its end-2026 fair value after the hike to US$4,650 from US$4,900, but left its US$5,400 target for the end of 2027 in place.
The bank’s Lina Thomas argued that rate rises should slow the rally, not kill it, because central banks are still buying about 91 tonnes a month.
The average before 2022 was 17 tonnes a month.
China has now bought gold for 22 consecutive months.
Goldman attributes almost all of its forecast 23 per cent rise through 2027 to that official demand, and to what it calls the “debasement trade”, in which investors hedge against fiscal deficits and doubts about monetary credibility and stability.
Silver is the noisier twin.
It is both a bullion investment metal and an industrial one.
Silver is used in electronics and solar panels, as it is the best electrical conductor.
It therefore trades on the same dollar and yield moves as gold, but with a sharper industrial kicker if Chinese and US manufacturing hold up.
A high gold-silver ratio still tempts some to argue silver is the cheaper of the two, but that is a relative call, not a free lunch.
For private buyers the message of the week is not a price target.
It is that paper markets can reverse in two sessions, and that the case for holding physical metal has only a little to do with Fed announcements.
Physical gold and silver only work as a store of value if they can be got at when they are needed.
In New Zealand, your bars and coins need to be stored in a secure but accessible location.
Choose a purpose-built vault.
Commonwealth Vault is among the options in Auckland and Christchurch.
Keep the title of your bullion with you, the owner, and the metal off the kitchen bench at home.
That is not a trading idea.
It is good, secure housekeeping.
The next things to watch are the Federal Reserve’s October meeting, World Gold Council purchase data and whether oil stays soft.
Warsh has said he is not finished.
Gold, for now, has not accepted the verdict.
Disclaimer: This article is provided for general information purposes only and does not constitute financial or investment advice. It should not be relied upon as a recommendation to buy, sell or hold any precious metal or other investment. Readers should consult a qualified investment adviser before making any investment decision.
