Fed Hike Jolts Gold Before Oil Retreat Fuels a Sharp Rebound

Traders welcomed the weekend after witnessing a volatile week in markets, with gold prices fluctuating as a result of the Federal Reserve's decision to raise interest rates. Following the September FOMC meeting, gold experienced a sharp decline from $4,340 to a low of $4,260 per ounce, but quickly rebounded to trade above $4,350 by the start of the US market on Friday.

This recovery was attributed to projections of elevated inflation expectations and another 25-basis-point rate hike before the end of 2026, as well as a drop in crude oil prices to below $100 per barrel. The Bank of Japan's overnight rate hike to 1.25% also contributed to the gold rebound. Looking ahead, the coming week is relatively light on economic data, with only FOMC participants' public comments and potential moves in oil, Treasury yields, and the US Dollar serving as possible catalysts.