Spot gold last traded at $4,386 an ounce on Thursday, having gained nearly 1% on the week and positioning itself to snap a three-week losing streak. The rally came shortly after the Federal Reserve raised its benchmark federal funds rate by 25 basis points on Wednesday, a move that historically pressures non-yielding assets but appears to have been shrugged off by market participants.
The 10-year Treasury yield continues to hover near the psychologically significant 5% level, and the Fed's own dot plot projects a year-end rate of approximately 4.1%. Yet analysts say the traditional rate-gold correlation is weakening. "Heading into the weekend, gold appears to have shrunk off the US rate hike," said Ole Hansen, head of commodity strategy at Saxo Bank. "This highlights a market where demand from less interest-rate-sensitive investors remains firm, even with yields still elevated."
Hansen added that the pattern mirrors dynamics seen in prior cycles. "Then, as now, underlying demand from investors is less sensitive to interest rates and yields provided an important offset to traditional macro headwinds. For now, that underlying demand appears to remain intact, and I maintain a bullish outlook that is being slowed but not halted by rate hikes."
Jeff Sarti, CEO of Morton Wealth, echoed the view that the rate move was marginal. "I think any minor 25 basis points here or there is noise," Sarti said. "I think the bigger signaling points are fiscal."
From a technical perspective, gold faces a resistance zone between $4,420 and $4,440 per ounce, with the 200-day moving average resting around $4,540. The metal's all-time high was set in January, and it also touched a notable level around August near $4,700 an ounce.
Beyond US policy, expectations are mounting that the Swiss National Bank will keep its policy rate unchanged at 0% when it announces its decision Thursday. Charlotte de Montpellier, a senior French and Swiss economist at ING, noted that the SNB is likely to retain its targeted foreign-exchange intervention approach. "As long as domestic inflation remains subdued and the franc stays strong, albeit without appreciating excessively, the SNB can continue to run a significantly more accommodative monetary policy stance than most other central banks," she said.
The economic calendar next week includes S&P Global flash PMI data on Wednesday, US weekly jobless claims on Thursday alongside the SNB rate decision, and US durable goods orders and revised University of Michigan consumer sentiment data on Friday.
