Gold Falls as Fed Signals Potential Rate Hike, Dollar Hits One-Year High

09:24 AM EDT, 06/18/2026 (MT Newswires) -- Gold traded lower early Thursday as the dollar rose to its highest level in more than a year after the Federal Reserve left interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday, while signaling that rates could rise later this year.

Gold for July delivery was last seen down US$106.50 to US$4,274.90 per ounce.

The drop comes after the Federal Open Market Committee on Wednesday left U.S. benchmark interest rates unchanged, but Bloomberg reported half of the committee members expect to raise rates this year as inflation remains well above the 2% target rate.

"Gold tumbled ... after a surprisingly hawkish FOMC meeting signalled the potential for another rate hike later this year," Saxo Bank wrote.

The potential for higher rates boosted the dollar, with the ICE dollar index last seen up 0.6 points to 100.69, the highest since May, 2025. Treasury yields were mixed, with the U.S. two-year note last seen paying 4.2%, up 0.7 basis points, while the yield on the 10-year note was down 5.3 points to 4.447%.

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